B3: Sharecropping A plot of land is owned by a Landlord but worked by a Tenant. The Tenant has an alternative job in the manufacturing sector that pays W per hour worked. Thus, if she provides /1 hours to farm the land, she incurs an opportunity cost w /1. The value of output from the plot is given by the production function VH + 10 with probability 0.5 y VH -10 with probability 0.5 where random variation in output are due to climatic conditions. The Landlord is risk-neutral, but the Tenant is risk-averse with a "coefficient of risk aversion" given by 0.5. The Landlord can observe the output produced by the Tenant, but cannot observe or infer the hours of effort she exerts. The Landlord offers a share-cropping contract consisting of an output share going to the Tenant, S, and a fixed payment, R. If R 2 0, this can be interpreted as a fixed component of the rent paid by the Tenant to the landlord. If R 0 O 8 = 0; R 0