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This thesis analyses the adoption of a mix of franchised and company-owned outlets among firms, namely, contractual heterogeneity within the firm. Contractual heterogeneity is explained by the existing literature as due to heterogeneous characteristics of the downstream outlets of a company. Such correspondence, however, is arguably at variance with reality. Furthermore, this literature has not been able to provide an answer to contractual heterogeneity in the presence of downstream homogeneity. This study contributes to the subject by proposing one such answer. The investigation is presented in two main parts. The first part provides a theoretical analysis of the problem and sets out a model representing the explanation proposed. The second part consists of an empirical investigation of the hypotheses set out in the first part. This empirical investigation is based ofdata collected by means of a survey of UK firms conducted specifically for the purpose of this study. The empirical analysis is performed by means of both a qualitative and an econometric study. The explanation uncovered by our theory, supported by our empirical results, shows that under certain conditions contract mixing represents a separating equilibrium which enables the company upstream (principal) to overcome problems related to hidden action, hidden information and uncertainty downstream. Under certain circumstances such organisational structure represents the 'optimal choice' for the principal in the trade-off between incentives and risk sharing. At the same time, it proves to be optimal for the heterogeneous agents (downstream) by providing them with their maximum level of expected utility. To the best of our knowledge this is the first study that investigates both sides of this agency relationship. In other words, this study demonstrates that the choice of a 'mixed' organisational firm can be driven by efficiency reasons rather than competition reducing targets by the firm.

With rising demographic growth, there is increasing interest in analytical studies that assess alternative policies to provide an optimal allocation of scarce natural resources while ensuring environmental sustainability. This dissertation consists of three essays in applied resource economics that are interconnected methodologically within the agricultural production sector of Economics. The first chapter examines the sustainability of biofuels by simulating and evaluating an agricultural voluntary program that aims to increase the land use efficiency in the production of biofuels of first generation in the state of Alabama. The results show that participatory decisions may increase the net energy value of biofuels by 208% and reduce emissions by 26%; significantly contributing to the state energy goals. The second chapter tests the hypothesis of overuse of fertilizers and pesticides in U.S. peanut farming with respect to other inputs and address genetic research to reduce the use of the most overused chemical input. The findings suggest that peanut producers overuse fungicide with respect to any other input and that fungi resistant genetically engineered peanuts may increase the producer welfare up to 36.2%. The third chapter implements a bioeconomic model, which consists of a biophysical model and a stochastic dynamic recursive model that is used to measure potential economic and environmental welfare of cotton farmers derived from a rotation scheme that uses peanut as a complementary crop. The results show that the rotation scenario would lower farming costs by 14% due to nitrogen credits from prior peanut land use and reduce non-point source pollution from nitrogen runoff by 6.13% compared to continuous cotton farming.