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the sequence of events is as follows. In a period, t, the supplier offers a contract to the retailer, and the retailer … excess inventory (we assume a lost sales model) to the next period. In period t 1, the supplier designs a new contract based … certain assumptions, we characterize and evaluate the supplier's optimal contract. To do so, we cast our problem as an adverse …
Persistent link: https://www.econbiz.de/10014047671
Post-communist countries offer new evidence on the relative importance of courts and relationships in enforcing contracts. Belief in the effectiveness of courts has a significant positive effect on the level of trust shown in new relationships between firms and their customers. Well-functioning...
Persistent link: https://www.econbiz.de/10013224923
We analyze a model where investors use a credit rating to decide whether to finance a firm. The rating quality depends on unobservable effort exerted by a credit rating agency (CRA). We study optimal compensation schemes for the CRA when a planner, the firm, or investors order the rating. Rating...
Persistent link: https://www.econbiz.de/10013084208
This paper applies direct tests for adverse selection and moral hazard in the market for child care. A unique data set containing quality measures of various characteristics of child care provided by 746 rooms in 400 centers, as well as the evaluation of the same attributes by 3,490 affiliated...
Persistent link: https://www.econbiz.de/10013245097
We present a North South model of international trade in which differentiated products are developed in the North. Sectors are populated by final-good producers who differ in productivity levels. Based on productivity and sectoral characteristics, firms decide whether to integrate into the...
Persistent link: https://www.econbiz.de/10013218970
Using the universe of large Canadian manufacturing firms in 1988 and 1996, we investigate to what extent outsourcing … outsourcing less likely; (ii) complementarities between the investments of the buyer and the seller are also associated with less … outsourcing; (iii) property rights predictions on the link between investment intensities and optimal ownership are only supported …
Persistent link: https://www.econbiz.de/10012751128
In an economy with imperfect labor contracts, differences in the distribution of human capital are an independent source of comparative advantage. I study a world economy with two sectors, one where output is produced by teams and another where individuals can work alone. When workers' abilities...
Persistent link: https://www.econbiz.de/10013228727
Outsourcing government service provision to private firms can improve efficiency and reduce rents, but there are risks … distribution program. This led 17 percent of treated locations to switch distributors. Introducing the possibility of outsourcing … cheating were also more likely to block the outsourcing process. We find no effect on price or quality of providing information …
Persistent link: https://www.econbiz.de/10013002242
Regression discontinuity designs (RDDs) are a popular method to estimate treatment effects. However, RDDs may fail to yield consistent estimates if the forcing variable can be manipulated by the agent. In this paper, we examine one interesting set of economic models with such a feature....
Persistent link: https://www.econbiz.de/10013117577
British Master and Servant law made employee contract breach a criminal offense until 1875. We develop a contracting … model generating equilibrium contract breach and prosecutions, then exploit exogenous changes in output prices to examine … prosecutions, and wages responded more to labor demand shocks. Coercive contract enforcement was applied in industrial Britain …
Persistent link: https://www.econbiz.de/10013124857