Careers in arm's-length contracting: Evidence from the Chilean wine-grape market

Pilar Jano, Brent Hueth

Research output: Contribution to journalArticlepeer-review


This paper investigates the presence of career and promotion-based incentives in the context of arm's-length contracting between wineries and independent wine-grape farmers. We hypothesise that long-term contracts represent a stage in a farmer's career after a series of short-term contracts. We develop a conceptual framework to frame the interaction between explicit performance incentives and implicit career incentives arising from the possibility of promotion to a long-term contract, conditional on wineries learning a farmer's potential for superior-quality production. Based on data from Chilean wine-grape farmers, we find evidence suggesting that implicit market-based incentives, usually studied in the context of employment contracts, are also important in arm's-length contracts used in procurement of farm output.

Original languageEnglish
Pages (from-to)173-198
Number of pages26
JournalEuropean Review of Agricultural Economics
Issue number1
StatePublished - 1 Jan 2023
Externally publishedYes


  • Chile
  • careers
  • contracts
  • implicit incentives
  • wine grapes


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