This article discusses the current state of contract theory and its usefulness for conceptualizing issues related to agricultural contracting. I will discuss the limitations of existing theory for applied work, and what methodological improvements are needed to enhance the usefulness of the...

Two well-known hypotheses from the literature on tournaments are that (1) tournaments can filter out common shocks thereby reducing agents risk exposure; and (2) disincentive effects can arise when a tournament scheme is administered on a group of mixed ability agents. While handicapping and/or...

This paper reports the results of an economic experiment investigating human subjects' preferences for two types of contracts tournaments and fixed performance standard contracts. Willingness to pay data was elicited through an auction and results suggest that subjects prefer fixed performance...

Experimental economics is used to compare tournaments (T) and fixed performance contracts (F) when agents have heterogeneous costs. Our primary findings were: (1) There is no statistical difference in average pooled effort (effort by high ability and low ability subjects are pooled together to...