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Long-Term Contracting with Time-Inconsistent Agents

Gottlieb, Daniel - 2020

We study contracts between naive present-biased consumers and risk-neutral firms. We show that the welfare loss from present bias vanishes as the contracting horizon grows. This is true both when bargaining power is on the consumers' and on the firms' side, when consumers cannot commit to...

Persistent link: https://www.econbiz.de/10012852328

Optimal Contracting under Mean-Volatility Ambiguity Uncertainties

Sung, Jaeyoung - 2020

argue that the second-best contract in general consists of two sharing rules: one for realized outcome and the other for …

Persistent link: https://www.econbiz.de/10012856242

Optimal Contracts under Moral Hazard and Costly Lying

Rhee, Keeyoung - 2020

agent truthfully reports that the project is likely to give a high return. The optimal outcome is achieved by a contract …

Persistent link: https://www.econbiz.de/10012841686

Optimal contracting with altruistic agents : a structural model of Medicare payments for dialysis drugs

Gaynor, Martin; Mehta, Nirav; Richards-Shubik, Seth - 2020

pricing methods, we theoretically characterize the optimal unrestricted contract in this screening environment with … multidimensional heterogeneity. We combine these results with the estimated model to construct the optimal contract and simulate … counterfactual outcomes. The optimal contract is a exible fee-for-service contract, which pays for reported treatments but uses …

Persistent link: https://www.econbiz.de/10012216358

Trust and contracts : empirical evidence

D'Acunto, Francesco; Xie, Jin; Yao, Jiaquan - 2020

Trust between parties should drive the negotiation and design of contract: if parties did not trust each others … over time, we find that lower trust increases contract completeness. Not only contract complexity but also the verifiable …

Persistent link: https://www.econbiz.de/10012318377

Optimal contracts for renewable electricity

Parlane, Sarah; Ryan, Lisa - 2019

Companies are increasingly choosing to procure their power from renewable energy sources, with their own set of potential challenges. In this paper we focus on contracts to procure electricity from renewable sources that are inherently unreliable (such as wind and solar). We determine the...

Persistent link: https://www.econbiz.de/10012063073

Relational contracts and trust in a high-tech industry

Calzolari, Giacomo; Felli, Leonardo; Koenen, Johannes; … - 2021

We study how informal buyer-supplier relationships in the German automotive industry affect procurement. Using unique data from a survey focusing on these, we show that more trust, the belief that the trading partner acts to maintain the mutual relationship, is associated with both higher...

Persistent link: https://www.econbiz.de/10012649766

Renegotiation of Long-Term Contracts as Part of an Implicit Agreement

Kostadinov, Rumen - 2018

Long-term relationships are often governed by a combination of contracts and implicit agreements. I show that there are welfare gains to writing long-term contracts with the intention of rewriting their terms at a later stage, despite lack of change in the underlying environment. This form of...

Persistent link: https://www.econbiz.de/10012932724

Pricing and Quality Provision in a Supply Relationship : A Model of Efficient Relational Contracts

Nistor, Cristina; Selove, Matthew - 2022

customizable good has sufficiently volatile demand, then a contract that includes a constant unit price premium only for this good …

Persistent link: https://www.econbiz.de/10013307910

Overconfidence and Endogenous Contract Incompleteness

Bao, Te; Dai, Yun; Wang, Yongqin - 2022

about their bargaining power ex ante, both of them may endogenously choose incomplete contract over complete contract even … explanation for the prevalence of contract incompleteness besides the existing ones in the literature …

Persistent link: https://www.econbiz.de/10013308240