Contract Design for the Purchase of Environmental Goods from Agriculture

摘要: An environmental stewardship program, whereby farmers are paid directly for the goods they provide, is developed by combining microparameter distribution model with mechanism design principles. The program overcomes information asymmetry between and governments accounts deadweight losses from distortionary taxes. characteristics of optimal input payment schedules derived. These determined tradeoffs farming profits, benefits, taxes, second-best except under restrictive conditions on taxes marginal product inputs pollution costs.