MORAL HAZARD, EXTERNALITIES, AND COMPENSATION FOR CROP DAMAGES FROM WILDLIFE

A principal-multiple agent model is used to examine wildlife damage ab atement and compensation programs in a setting in which farmers suffer damages and hunters use the wildlife for recreational purposes. In ad dition to externalities inherent in abatement, abatement/compensation policy confronts the issue of moral hazard. By representing the princi pal as a wildlife management authority who acts on behalf of hunters, we investigate contracts in which transfers of more or less severe hun ting regulations, a public good that aids in dispersing wildlife, and monetary payments from hunting license fees can be used to overcome mo ral hazard. (C) 1996 Academic Press, Inc.