Some Aspects of Linked Product and Credit Market Contracts Among Risk‐Neutral Agents

In Pranab K. Bardhan (ed.), The Economic Theory of Agrarian Institutions. Oxford University Press UK (1989)
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Abstract

The authors explore, in a principal‐agent model of interlinking of production credit and crop marketing, the terms of equilibrium contracts under risk neutrality; in particular, they examine the situation in which one of the two relevant instruments—the rate of commission on crop sale and the rate of interest on credit—is redundant.

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