Relational contracts and adaptation: Application to a pork producer contract

Abstract

In this article, we apply a formal theoretical model of adaptation to an empirical setting within specialized pig production. The objective is to allocate decision rights ex ante so that actual decisions taken ex post will optimize the profit accruing to both parties in a contractual or integrative relation. Motivated by the situation in the market for piglets in Denmark, we focus on an analysis of a vertical partnership between a piglet producer and a finisher. By applying a model of adaptation to the particular setting, we provide a solid basis for discussions on both the importance of efficiently allocating decision rights and the usefulness of the partnership as organizational form between specialized pig producers.

Published in

Agribusiness
2008, Volume: 24, number: 3, pages: 342-354

UKÄ Subject classification

Business Administration


Publication identifier

DOI: https://doi.org/10.1002/agr.20162

Permanent link to this page (URI)

https://res.slu.se/id/publ/100265