Pretend-but-Perform Contracts in Sharecropping
نویسندگان
چکیده
This paper is an exercise in the design of contracts within aworld of two persons, namely a landlord and a tenant, restricted tosharecropping. The landlord sets the shares according to the profit-maximizing "golden rule" ([4]), which depends on certain characteris-tics of the tenant. The tenant declares these characteristics, and isthus allowed to pretend to be someone else, but must then performconsistently with his pretended identity. This is the idea of a "pre-tend-but-perform contract". It turns out that legalizing such con-tracts improves the lot, not only for the tenantl but in certain salientclasses of cases, that also of the landlord, as compared to using thetrue identity of the tenant.
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