Agricultural Markets As Relative Performance Evaluation

Preprint
Publisher Website
Google Scholar
  • 1 January 2001
    • preprint
      • Published in RePEc
Abstract
Relative performance schemes such as tournaments are commonly used in markets for a variety of livestock and processing commodities, while explicit versions of these schemes are rarely used in markets for fresh fruits and vegetables and specialty grains. We show how contracts for these latter commodities do in fact provide relative performance incentives, albeit indirectly, via a payment mechanism that depends on market prices. In such contracts, compensation is often an increasing function of revenue; this implements a relative performance scheme by making each grower's payment an increasing function of his own output but a decreasing function of other's output.
All Related Versions

This publication has 0 references indexed in Scilit: