Next Article in Journal
Material Transitions and Associated Embodied Energy Input of Rural Buildings: Case Study of Qinyong Village in Ningbo China
Next Article in Special Issue
The Influence of Collaboration Initiatives on the Sustainability of the Cashew Supply Chain
Previous Article in Journal
Two-Stage Coordinate Optimal Scheduling of Seawater Pumped Storage in Active Distribution Networks
Previous Article in Special Issue
Toward Supply Chain Sustainability: Governance and Implementation of Joint Sustainability Development
Article Menu
Issue 6 (June) cover image

Export Article

Open AccessArticle
Sustainability 2018, 10(6), 2015; https://doi.org/10.3390/su10062015

The Principal–Agent Leasing Model of “Company + n Farmers” under Two Division Modes

School of Business Administration, South China University of Technology, Guangzhou 510640, China
*
Authors to whom correspondence should be addressed.
Received: 30 April 2018 / Revised: 3 June 2018 / Accepted: 5 June 2018 / Published: 14 June 2018
(This article belongs to the Special Issue Toward Sustainability: Supply Chain Collaboration and Governance)
View Full-Text   |   Download PDF [418 KB, uploaded 14 June 2018]   |  

Abstract

The principal–agent leasing model consisting of one risk-neutral company and n risk-averse farmers is proposed by taking into consideration the characteristics of contract-farming and the fulfilment issues existing in the production process of agricultural products. We also discuss the optimal incentive coefficients and rents for n farmers under the two strategies of decentralization and concentration. The analysis suggests that the two division modes have no influence on the determination of the optimal effort level and the incentive coefficient of each party, and under the n farmers, the incentive coefficient given by the company to a single farmer household is not affected by the conditions of other farmer households. In terms of rent, land rent in the decentralized mode is strictly higher than land rent under the centralized mode. In the two modes of division, the total income of the company and the farmers is equal. Taking into account the randomness of the production process of agricultural products, the company will prefer to choose the centralized mode, and the farmers will tend to choose the decentralized mode in cooperation. View Full-Text
Keywords: “company + n farmers”; centralized mode; decentralized mode; principal–agent theory; leasing model; incentive coefficient “company + n farmers”; centralized mode; decentralized mode; principal–agent theory; leasing model; incentive coefficient
Figures

Figure 1

This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited. (CC BY 4.0).
SciFeed

Share & Cite This Article

MDPI and ACS Style

Yu, J.; Zheng, X.; Zhou, Y.; Zhang, Q. The Principal–Agent Leasing Model of “Company + n Farmers” under Two Division Modes. Sustainability 2018, 10, 2015.

Show more citation formats Show less citations formats

Note that from the first issue of 2016, MDPI journals use article numbers instead of page numbers. See further details here.

Related Articles

Article Metrics

Article Access Statistics

1

Comments

[Return to top]
Sustainability EISSN 2071-1050 Published by MDPI AG, Basel, Switzerland RSS E-Mail Table of Contents Alert
Back to Top