Affordable Access

The (Im)Possibility of Reverse Share Tenancy

Publication Date
  • D23 - Organizational Behavior
  • Transaction Costs
  • Property Rights
  • D86 - Economics Of Contract: Theory
  • Q12 - Micro Analysis Of Farm Firms
  • Farm Households
  • And Farm Input Markets
  • O12 - Microeconomic Analyses Of Economic Development


Under the assumption that the landlord is risk-neutral and the tenant is risk-averse, sharecropping is second-best in that it trades off risk sharing and incentives. Many, however, have reported instances of reverse share tenancy, or sharecropping in which the landlord is considerably poorer than the tenant. This note shows that reverse share tenancy is impossible under the canonical Stiglitzian model of sharecropping but becomes possible if and only if (i) both the landlord and the tenant can be assumed risk-averse; or (ii) there exist significant transactions costs making sharecropping more desirable than either a wage or fixed rent contract.

There are no comments yet on this publication. Be the first to share your thoughts.


Seen <100 times