Showing 1 - 10 of 404
Motivated by challenges facing IT procurement, this paper studies a hybrid procurement model where a reverse auction of a fixed-price IT outsourcing contract may be followed by renegotiation to extend the contract's scope. In this model, the buyer balances the need to incentivize...
Persistent link: https://www.econbiz.de/10013215390
We study a dynamic model of monopolistic provision of commitment devices to sophisticated, Strotzian decision makers. We allow for unobservable heterogeneity at the contracting stage in the agents' preferences for commitment vs. flexibility. The first-best contracts under complete information...
Persistent link: https://www.econbiz.de/10008859687
We study optimal contracting between a firm selling a divisible good that exhibits positive externality and a group of agents in a social network. The extent of externality that each agent receives from the consumption of neighboring agents is privately held and is unknown to the firm. By...
Persistent link: https://www.econbiz.de/10011750141
We study the effects of exclusive contracts and market-share discounts (i.e., discounts conditioned on the share a firm receives of the customer's total purchases) in an adverse selection model where firms supply differentiated products and compete in non-linear prices. We show that exclusive...
Persistent link: https://www.econbiz.de/10013153195
Strausz (2017) claims that crowdfunding implements the optimal mechanism design outcome in an environment with entrepreneurial moral hazard and private cost information. Unfortunately, his analysis, solution and claim depend critically on imposing an untenable condition (29) that he had...
Persistent link: https://www.econbiz.de/10012931333
The paper studies the canonical hold-up problem with one-sided investment by the buyer and full ex post bargaining power by the seller. The buyer can covertly choose any distribution of valuations at a cost and privately observes her valuation. The main result shows that in contrast to the...
Persistent link: https://www.econbiz.de/10014482789
This paper considers the efficiency of a contestable natural monopoly if consumers are heterogeneous and the monopolist can differentiate prices imperfectly. The paper shows that a no-distortion-at-the-top result, which is standard in models with restricted entry, may also appear in a...
Persistent link: https://www.econbiz.de/10014072718
We extend the theory of bilateral vertical contracting to a double moral hazard setting where upstream and downstream firms make complementary investments that enhance demand, downstream firms make fixed investments to enter the downstream market, and contracts are private information and...
Persistent link: https://www.econbiz.de/10013219356
We study monopolistic design of a menu of non-linear tariffs when consumers have biased prior beliefs regarding their future preferences. In our model, consumers are "optimistic'' if their prior belief assigns too much weight to states of nature characterized by large gains from trade. A...
Persistent link: https://www.econbiz.de/10011700064
We analyze the impact of the length of incomplete contracts on investment and surplus sharing. In the bilateral relationship explored, the seller controls the input and the buyer invests. With two-part tariffs, the length of the contract is irrelevant: the surplus is maximal and goes to the...
Persistent link: https://www.econbiz.de/10013039131