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Relational contracts and adaptation: application to a pork producer contract

Author

Listed:
  • Kostas Karantininis

    (Institute of Food and Resource Economics (FØI), Faculty of Life Sciences (LIFE), University of Copenhagen (KU), Denmark)

  • Jesper T. Graversen

    (Institute of Food and Resource Economics (FØI), Faculty of Life Sciences (LIFE), University of Copenhagen (KU), Denmark)

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. © 2008 Wiley Periodicals, Inc.

Suggested Citation

  • Kostas Karantininis & Jesper T. Graversen, 2008. "Relational contracts and adaptation: application to a pork producer contract," Agribusiness, John Wiley & Sons, Ltd., vol. 24(3), pages 342-354.
    • Handle: RePEc:wly:agribz:v:24:y:2008:i:3:p:342-354
    DOI: 10.1002/agr.20162
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    References listed on IDEAS

    as
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    9. Gibbons, Robert, 2005. "Four forma(lizable) theories of the firm?," Journal of Economic Behavior & Organization, Elsevier, vol. 58(2), pages 200-245, October.
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    Cited by:

    1. Pascucci, Stefano & Cicatiello, Clara & Franco, Silvio & Pancino, Barbara & Davide, Marino, 2011. "Back to the Future? Understanding Change in Food Habits of Farmers' Market Customers," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 14(4), pages 1-22, November.
    2. Claude Ménard, 2018. "Organization and governance in the agrifood sector: How can we capture their variety?," Agribusiness, John Wiley & Sons, Ltd., vol. 34(1), pages 142-160, December.

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