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Title:Producer protection legislation and termination damages in the presence of contracting frictions PDF Logo
Authors:Wu, Steven Y.
Issue Date:2009
Series/Report no.:IZA Discussion Papers 4373
Abstract:This study models producer protection legislation that would grant growers the right to claim damages (PPLD) if their contracts are prematurely terminated. In the absence of contracting frictions that prevent contractors from redesigning contracts to accommodate exogenous policy changes, PPLD would not be distortionary or redistributive. If contracting frictions exist, then PPLD would have efficiency and redistributive effects, though the direction and magnitude depends on the size of PPL damages vis-à-vis expected damages under existing contract law. This study clarifies the conditions under which PPLD would decrease efficiency and protect growers.
moral hazard
agricultural policy
producer protection legislation
contract law
Persistent Identifier of the first edition:urn:nbn:de:101:1-2009100277
Document Type:Working Paper
Appears in Collections:IZA Discussion Papers, Forschungsinstitut zur Zukunft der Arbeit (IZA)

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