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Formal contracts, relational contracts, and the holdup problem
Itō, Hideshi (contributor); Morita, Hodaka (contributor) - 2006
Persistent link: https://www.econbiz.de/10003364841
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Insurance and incentives in sharecropping
Braido, Luis H. B. - 2003
This essay surveys some recent empirical works about sharecropping. The basic theoretical trade-offs are discussed in the introduction. Section 1 discusses the empirical research on resource allocation. This section is divided in two subsections: one studying the effects of tenure stability on...
Persistent link: https://www.econbiz.de/10011404325
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Is marriage as good as a contract?
Cigno, Alessandro - 2013
Neither marriage nor a legally enforceable contract serves any useful purpose if the parties have access to a perfect credit market. In the presence of credit rationing, efficiency and utility equalization are guaranteed only by a legally enforceable contract. Separate-property marriage may...
Persistent link: https://www.econbiz.de/10010227229
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Minimum wages and relational contracts
Fahn, Matthias - 2016
The need to give incentives is usually absent in the literature on minimum wages. However, especially in the service sector it is important how well a job is done, and employees must be incentivized to perform accordingly. Furthermore, many aspects regarding service quality cannot be verified,...
Persistent link: https://www.econbiz.de/10011499953
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Reciprocity in dynamic employment relationships
Fahn, Matthias - 2019
This paper explores how a relational contract establishes a norm of reciprocity and how such a norm shapes the provision of informal incentives. Developing a model of a long-term employment relationship, I show that generous upfront wages that activate the norm of reciprocity are more important...
Persistent link: https://www.econbiz.de/10012002999
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Under/over-investment and early renegotiation in public-private partnerships
Danau, Daniel; Vinella, Annalisa - 2019
construction stage for the infrastructure to operationalise. This entails that, after an investment is made to begin building the … infrastructure, its construction is completed at a cost, which increases with the investment at an increasing rate, and is higher if … investment. Once the infrastructure is in place, the firm manages it, taking advantage of the (usual) synergy between …
Persistent link: https://www.econbiz.de/10012119945
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Fairness, incentives and contractual incompleteness
Fehr, Ernst; Klein, Alexander; Schmidt, Klaus M. - 2001
We show that concerns for fairness may have dramatic consequences for the optimal provision of incentives in a moral hazard context. Incentive contracts that are optimal when there are only selfish actors become inferior when some agents are concerned about fairness. Conversely, contracts that...
Persistent link: https://www.econbiz.de/10011398105
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Relational incentive contracts with persistent private information
Malcomson, James M. - 2015 - This version: July 24, 2015
This paper investigates relational incentive contracts with continuous, privately-observed agent types that are persistent over time. With fixed agent types, full separation is not possible when continuation equilibrium payoffs following revelation are on the Pareto frontier of attainable...
Persistent link: https://www.econbiz.de/10011300994
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Nitpicky insurers and the law of contracts
Bourgeon, Jean-Marc; Picard, Pierre M. - 2017
The standard economic analysis of the insured-insurer relationship under moral hazard postulates a simplistic setup that hardly explains the many features of an insurance contract. We extend this setup to include the situation that the insured was facing at the time of the accident and the...
Persistent link: https://www.econbiz.de/10011723471
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Formal contracts, relational contracts, and the threat-point effect
Itō, Hideshi; Morita, Hodaka - 2011
delivery is of value even when relation-specific investment is purely cooperative. In particular, there is a range of parameter … values in which a higher investment can be implemented only if a formal fixed-price contract is written and combined with an … negative, i.e., the relation-specific investment decreases the surplus under no trade. This possibility, although very …
Persistent link: https://www.econbiz.de/10009240848