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Author: Jonathan David Levin
Publisher:
ISBN:
Category :
Languages : en
Pages : 133
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Author: Jonathan David Levin
Publisher:
ISBN:
Category :
Languages : en
Pages : 133
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Author: James M. Malcomson
Publisher:
ISBN:
Category :
Languages : en
Pages :
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Author: Arijit Mukherjee
Publisher:
ISBN:
Category :
Languages : en
Pages : 42
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Firms often combine career concerns based incentives with incentives created through relational performance contracts. In this context, disclosure of worker's productivity information enhances career concerns based incentives, but may reduce the firm's ability to sustain relational contracts. The latter effect originates as upon reneging on the relational contract the firm can continue to rely on the career concerns based incentives. Thus, stronger is this incentive the larger is the punishment payoff of the firm. I consider an environment where a long-run firm faces a sequence of short-run workers, who can subsequently get raided (poached). The disclosure policy of the firm determines how much information about the worker's productivity it will share with the potential raiders. I provide a characterization of the optimal disclosure policy. When relational contracts substitutes career concern incentives, the optimal disclosure policy follows a cut-off rule where the more patient firms always opt for opaqueness. Also, the firm never combines the two forms of incentives when they are substitutes. Both of these results need not hold if the incentives are complements. I further show that in presence of firm specific matching gains, the set of discount factor that supports transparency is increasing in the size of the matching gain.
Author: Marina Cynthia Halac
Publisher:
ISBN:
Category :
Languages : en
Pages : 322
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Author: Chang-Koo Chi
Publisher:
ISBN:
Category :
Languages : en
Pages : 35
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This paper analyzes relational contracts under moral hazard. We first show that if the available information (signal) about effort satisfies a generalized monotone likelihood ratio property, then irrespective of whether the first-order approach (FOA) is valid or not, the optimal bonus scheme takes a simple form. The scheme rewards the agent a fixed bonus if his performance index xceeds a threshold, like the FOA contract of Levin (2003), but the threshold can be set differently. We next derive a sufficient and necessary condition for non-verifiable information to improve a relational contract. Our new informativeness criterion sheds light on the nature of an ideal performance measure in relational contracting.
Author: James M. Malcomson
Publisher:
ISBN:
Category :
Languages : en
Pages :
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Author: Robert S. Gibbons
Publisher: Princeton University Press
ISBN: 0691132798
Category : Business & Economics
Languages : en
Pages : 1248
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(E-book available via MyiLibrary) In even the most market-oriented economies, most economic transactions occur not in markets but inside managed organizations, particularly business firms. Organizational economics seeks to understand the nature and workings of such organizations and their impact on economic performance. The Handbook of Organizational Economics surveys the major theories, evidence, and methods used in the field. It displays the breadth of topics in organizational economics, including the roles of individuals and groups in organizations, organizational structures and processes, the boundaries of the firm, contracts between and within firms, and more.
Author: Rocco Macchiavello
Publisher:
ISBN:
Category : Contracts
Languages : en
Pages : 0
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Book Description
Relational contracts -- informal self-enforcing agreements sustained by repeated interactions -- are ubiquitous both within and across organizational boundaries. This review highlights recent empirical contributions in selected areas. We begin by reviewing some recent work that explicitly takes the dynamic incentive compatibility constraints that underpin relational contract models to the data. We then discuss the relationship between relational contracting and firms' performance. We conclude pointing in directions that we consider to be particularly ripe for future work.
Author: Akifumi Ishihara
Publisher:
ISBN:
Category :
Languages : en
Pages :
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This dissertation contains three essays on self-enforcing implicit contracts in economic transactions and politics. Chapter 2 studies a repeated agency model with two tasks where the agent has private information on the first task and there is no verifiable performance signal for the second task. The equilibrium level of the first task is determined so as to guarantee the credibility of the relational contracts to provide incentives for the second task. It implies interesting economic results including non-monotonic relation between the discount factor and the total surplus, social desirability of unverifiability, and implications for organization design. Chapter 3 studies a model of political contribution of dynamic common agency where state-contingent agreements must be self-enforced. First, we investigate the punishment strategy for supporting the self-enforcing mechanism. The most severe punishment strategy on the principals takes the form of a two-phase scheme in general. Second, we characterize the payoff set of the equilibria on which the same decision is chosen by the agent through implicit agreements and examine whether it can achieve the same payoff as in the standard static menu auction model. It implies that there could be an equilibrium outcome in a static menu auction that cannot be supported in our model for any discount factor. Chapter 4 studies repeated political competition with policy-motivated citizen candidates. The dynamic relationship could cause strategic candidacy in two-candidate competition, such as in circumstances where two candidates stand for election and one of them has no chance to win. The candidate can choose her implementing policy depending on the set of the rival candidates in the election and the rival candidate actually has an incentive to stand even with no chance to win since it can induce policy compromises from the winning candidate.
Author: David Frydlinger
Publisher: Springer Nature
ISBN: 3030650995
Category : Business & Economics
Languages : en
Pages : 327
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Book Description
Today’s business environment is constantly evolving, filled with volatility, uncertainty, complexity and ambiguity and driven by digital transformation, globalization, and the need to creating value through innovation. These shifts demand that organizations view contracting through a different lens. Since it is impossible to predict every what-if scenario in a transactional contract, organizations in strategic and complex partnerships must shift to a mindset of shared goals and objectives built upon a strong foundation of transparency and trust, working together to mitigate risk much better than merely shifting risk to the weaker party. Contracting in the New Economy helps you to not only develop this mindset – but also offers the practical tools needed to embrace the social side of contracting, enabling your organization to harness the value creating potential of formal relational contracts. Briefly sharing the theoretical foundations that prove relational contracting works, it goes well beyond theory by providing powerful examples of relational contracting principles in practice. In addition, the authors provide a practical and proven approach for helping you to put relational contracting theory into practice for your own relationships. First by providing a framework for approaching any contracting situation and helping organizations finding the best contract model for each situation. And then by sharing five proven steps you can take to create an effective relational contract for you own strategic and complex business relationships. For anyone involved in developing contracts —lawyers, in-house counsels, contract managers, C-level managers, procurement officers, and so on — this book will empower you to create powerful cooperative alliances that will help you reach —and surpass — your business goals in today’s dynamic new environment.
