Agricultural contracts and crop insurance are important ways for farmers to mitigate risks in modern U.S. agriculture. In this paper, we investigate the effect of crop insurance enrollment on farmers’ participation of marketing contracts. Following Ligon (2003), we setup a mechanism design framework to demonstrate an integrator’s contract design problem where farmers are assumed to be expected ...

Abstract We assemble homeowner insurance claims from 28 independently operated country subsidiaries of a multinational firm. propose new model, in which consumers can make invalid and firms deny valid claims, as is common the data. In trust honesty shape equilibrium contracts, disputes, claim payments, especially when disputes are too small for courts. test model by investigating incidence, dis...

When the indemnity schedule is contingent on the farmer’s price and individual yield, an optimal crop revenue insurance contract depends only on the farmer’s gross revenue. However, this design is not efficient if, as is the case with available contracts, the coverage function is based on imperfect estimators of individual yield and/or price. The producer’s degree of prudence and the extent of ...

This Essay has two goals: one descriptive and one normative. Descriptively, it explicates the connection between interpretation of insurance contracts and the Insurer’s disclosure duty. Disclosure duties and interpretation rules constitute a two way street. The interpretation of insurance contracts by courts, ex post, influences the incentives of insurance companies to disclose information to c...