Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/36172
Authors: 
Wu, Steven Y.
Year of Publication: 
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.
Subjects: 
Contracts
moral hazard
agricultural policy
producer protection legislation
contract law
JEL: 
Q12
Q18
K12
D82
D86
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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