Abstract
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 language | English |
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Pages (from-to) | 173-198 |
Number of pages | 26 |
Journal | European Review of Agricultural Economics |
Volume | 50 |
Issue number | 1 |
DOIs | |
State | Published - 1 Jan 2023 |
Externally published | Yes |
Keywords
- Chile
- careers
- contracts
- implicit incentives
- wine grapes