Abstract
Mechanism design theory is used to characterize the properties of a least-cost CRP. If marginal land rents decrease with acres farmed then a least-cost CRP is a set of nonlinear price schedules. If marginal land rents are independent of acres farmed then an offer system constitutes a least-cost CRP. The least-cost offer system gives a useful estimate of the upper bound of a least-cost CRP. Empirical results suggest that a 34-million-acre CRP should have cost no more than $1 billion per year.
| Original language | English (US) |
|---|---|
| Title of host publication | The Economics of Agri-Environmental Policy |
| Publisher | Taylor and Francis |
| Pages | 257-269 |
| Number of pages | 13 |
| Volume | 2 |
| ISBN (Electronic) | 9781351146968 |
| ISBN (Print) | 9780815397694 |
| State | Published - Nov 30 2017 |
Keywords
- Asymmetric information
- Contract
- Mechanism design
- Private information
