Search Results - subject:"Incomplete contracts"

Exit options in incomplete contracts with asymmetric information

Bester, Helmut; Krähmer, Daniel - 2008

This paper analyzes bilateral contracting in an environment with contractual incompleteness and asymmetric information. One party (the seller) makes an unverifiable quality choice and the other party (the buyer) has private information about its valuation. A simple exit option contract, which...

Persistent link: https://www.econbiz.de/10010343931

Delegation with incomplete and renegotiable contracts

Gerratana, Emanuele; Koçkesen, Levent - 2008 - This version: April 2008

unobservable and incomplete contracts with and without renegotiation opportunities under the assumption that the principal cannot …

Persistent link: https://www.econbiz.de/10012001777

Incomplete Contracting, Renegotiation, and Expectation-Based Loss Aversion

Herweg, Fabian; Karle, Heiko; Muller, Daniel - C.E.P.R. Discussion Papers - 2014

We consider a simple trading relationship between an expectation-based loss-averse buyer and profit-maximizing sellers. When writing a long-term contract the parties have to rely on renegotiations in order to ensure materially efficient trade ex post. The type of the concluded long-term contract...

Persistent link: https://www.econbiz.de/10011083642

Privatization and Quality: Evidence from Elderly Care in Sweden

Bergman, Mats; Johansson, Per; Lundberg, Sofia; … - C.E.P.R. Discussion Papers - 2014

Non-contractible quality dimensions are at risk of degradation when the provision of public services is privatized. However, privatization may increase quality by fostering performance-improving innovation, particularly if combined with increased competition. We assemble a large data set on...

Persistent link: https://www.econbiz.de/10011084097

Transaction costs and the property rights approach to the theory of the firm

Muller, Daniel; Schmitz, Patrick W - C.E.P.R. Discussion Papers - 2014

The standard property rights approach is focused on ex ante investment incentives, while there are no transaction costs that might restrain ex post negotiations. We explore the implications of such transaction costs. Prominent conclusions of the property rights theory may be overturned: A party...

Persistent link: https://www.econbiz.de/10011084198

Optimal Ownership of Public Goods Reconsidered

Schmitz, Patrick W - C.E.P.R. Discussion Papers - 2014

Consider a non-governmental organization (NGO) that can invest in a public good. Should the government or the NGO own the public project? In an incomplete contracting framework with split-the-difference bargaining, Besley and Ghatak (2001) argue that the party who values the public good most...

Persistent link: https://www.econbiz.de/10011084400

Joint Ventures and the Property Rights Theory of the Firm: a Review of the Literature

Gattai, Valeria; Natale, Piergiovanna - Dipartimento di Economia, Metodi Quantitativi e … - 2014

Joint ventures (JVs) are a very common form of inter-firm collaborations and, not surprisingly, the object of a vast literature, spanning from economics to management and business studies. Issues of control are central to the definition of JV, which naturally begs an interpretation in the...

Persistent link: https://www.econbiz.de/10011093806

‪Incomplete Contracts as a Screening Device in Competing Vertical Inter-Firm Relationships‪

Sicoli, Marta; Sorge, Marco Maria - In: Revue d'économie industrielle n° 147 (2014) 3, pp. 141-181

incomplete contracts in vertical inter-firm relationships. This paper offers a screening rationale for contractual incompleteness … deliberately choose to exploit incomplete contracts to warrant truthful revelation of the retailer?s private information. While the … separation always obtains under incomplete contracts in the presence of countervailing incentives.? …

Persistent link: https://www.econbiz.de/10011186951

On the value of partial commitment for cooperative investment in buyer–supplier relationship

Sousa, José; Fairise, Xavier - In: Journal of Economics 111 (2014) 2, pp. 151-171

Does formal contracting foster cooperation in a buyer–supplier relationship? In line with the literature, we find that a renegotiable contract with relationship-specific joint investments does not make it possible to reach the first-best. However, we show that a renegotiable contract may...

Persistent link: https://www.econbiz.de/10010863051

To allot or not to allot public services? An incomplete contract approach

Brux, Julie; Desrieux, Claudine - In: European Journal of Law and Economics 37 (2014) 3, pp. 455-476

Using an incomplete contract framework, we analyze the consequences of allotment in public procurement. Allotment aims at dividing a public service into several lots that can be awarded to different operators. This increases the number of bidders during the competitive tendering, as well as it...

Persistent link: https://www.econbiz.de/10010863196