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Efficient and Nearly Efficient Partnerships

Legros, Patrick; Matthews, Steven A. - 1992

This paper shows in two ways that the degree to which free-riding diminishes the performance of deterministic partnerships may be less than has been generally thought. First, a necessary and sufficient condition is provided for a partnership to sustain full efficiency. It implies that many...

Persistent link: https://www.econbiz.de/10012235805

Renegotiation of Sales Contracts

Matthews, Steven A. - 1993

Contracts adopted with later renegotiation in mind may take simple forms. In a principal-agent model, if renegotiation … project" to the agent via a sales contract. If only singleton (single-scheme) contracts are feasible, the equilibrium initial … (second-best) efficient allocations. Even when meny (multiple-scheme) contracts are available, if the selection of a scheme …

Persistent link: https://www.econbiz.de/10012235864

Balancing Performance Measures When Agents Behave Competitively in an Environment With Technological Interdependencies

Sandner, Kai - 2008

This paper addresses the question, what metrics should be used for performance evaluation and in particular how they should be weighted and combined in the presence of technological interdependencies when the agents exhibit variedly strong developed rivalry. We find that the principal reacts to...

Persistent link: https://www.econbiz.de/10010427754

Differences in Social Preferences - Are They Profitable for the Firm?

Küpper, Hans-Ulrich; Sandner, Kai - 2008

This paper analyzes the impact of heterogeneous (social) preferences on the weighting and combination of performance measures as well as on a firm’s profitability. We consider rivalry, egoism and altruism as extreme forms within the continuum of possible preferences and show that the principal...

Persistent link: https://www.econbiz.de/10010427755

Reciprocity in dynamic employment relationships

Fahn, Matthias - 2019

This paper explores the optimal provision of dynamic incentives for employees with reciprocal preferences. Building on the presumption that a relational contract can establish a norm of reciprocity, I show that generous upfront wages that activate an employee's reciprocal preferences are more...

Persistent link: https://www.econbiz.de/10012290329

Size Matters - 'Over'investments in a Relational Contracting Setting

Englmaier, Florian; Fahn, Matthias - 2018

problems of limited commitment and limited liquidity. If a firm has to rely on relational contracts to motivate its workforce …

Persistent link: https://www.econbiz.de/10011932927

Contracting over commitment vs. flexibility under asymmetric information

Galperti, Simone - 2011

. flexibility. The first-best contracts under complete information allow to successfully commit to the optimal level of flexibility …

Persistent link: https://www.econbiz.de/10010282919

Optimal procurement of a credence good under limited liability

Bester, Helmut; Yaofu, Ouyang - 2018

This paper analyzes the optimal contract for a consumer to procure a credence good from an expert when (i) the expert might misrepresent his private information about the consumer's need, (ii) the expert might not choose the requested service since his choice of treatment is non-observable, and...

Persistent link: https://www.econbiz.de/10011782152

Real-Time Hierarchical Resource Allocation

Zandt, Timothy Van - 1997

This paper presents a model that distinguishes between decentralized information processing and decentralized decision making in organizations; it shows that decentralized decision making can be advantageous due to computational delay, even in the absence of communication costs. The key feature...

Persistent link: https://www.econbiz.de/10012236043

The Breakdown of Authority

Frisell, Lars - 2003

This paper studies organizations with autocratic decisionmaking.

Persistent link: https://www.econbiz.de/10005843663

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