Termination Clauses in Long-Term Contracts

Many long-term contracts incorporate a termination clause. This paper argues that when agents have hidden information, such a clause has a beneficial incentive effect—it enables a principal to screen agents' private information at a lower cost. In a two-period model, this paper characterizes the optimal long-term contract with a termination clause, which specifies that the principal will switch agents in the second period when the first-period cost is high. The analysis delineates how the optimality of this clause depends on the intertemporal cost correlation structure, on the limits to agents' liability, and on the principal's degree of commitment.     

Long-Term or Short-Term Managerial Incentive Contracts

This paper deals with the strategic role of the temporal dimension of contracts in a duopoly market. Is it better for a firm to sign long-term incentive contracts with managers or short-term contracts? For the linear case, with strategic substitutes (complements) in the product market, the incentive variables are also strategic substitutes (complements). It is shown that a long-term contract makes a firm a leader in incentives, while a short-term contract makes it a follower. We find that, under Bertrand competition, in equilibrium one firm signs a long-term contract and the other firm short-term incentive contracts; however, under Cournot competition, the dominant strategy is to sign long-term incentive contracts.     

Market-Share Contracts with Asymmetric Information

In this paper, a dominant firm and competitive fringe supply substitute goods to a retailer who has private information about demand. We show that it is profitable for the dominant firm to condition payment on how much the retailer buys from the fringe (market-share contracts). The dominant firm thereby creates countervailing incentives for the retailer and, in some cases, is able to obtain the full-information outcome (unlike in standard screening models, where the agent earns an information rent in the high-demand state and output is distorted in the low-demand state). Our results have implications for fidelity rebates, all-units discounts, and competition policy. Although some crowding out of the fringe may occur when demand is low, we show that market-share contracts need not be harmful for welfare.     

Optimal Contracts for Long-Term Decisions and the Threat of Dismissal

This paper studies a simple agency model where an agent's decision can affect his or her own future payoffs as well as the principal's. The threat of dismissal becomes an important part of an incentive scheme even if the principal can use the performance-based wage contract. However, if the agent's future payoffs depend on the past realized performance, but not on the past decision directly, or if the agent is risk-neutral, it is not optimal to use the threat of dismissal. As the agent's discretion over his future payoffs increases, the principal relies more on the threat of dismissal but less on the wage contract.     

Role of Information Rents in Relational Contracts

We study a repeated contracting model in which the agent has private information and the performance measure is unverifiable. In an optimal stationary contract, when the discount factor is not high, the principal's objective shifts from purely reducing the information rent toward increasing the total surplus to sustain the relational contract. As a result, the total surplus is not monotonically increasing in the discount factor and could decrease when the unverifiable performance measure becomes verifiable.     

Interim Realities

Abstract

This paper presents findings from a study of information technology implementation practices in National Health Service hospitals in England. The results suggest that there is a general direction of travel, which involves the progressive linking together of individual systems, so that they are interoperable. We argue that the findings are consistent with meta-governance arguments, but that it is necessary to complement this perspective with an understanding of the nature of information technologies in order to understand them properly. We suggest that ‘interim systems’ will be the reality on the ground for many health care organizations for the foreseeable future.     

信息不对称下供应链信用激励契约的数学模型分析

通过委托-代理理论来分析在信息不对称的情况下,零售商和供应商之间是如何进行博弈的,通过建立博弈模型来分析在显性和隐性的两种激励制度下两者是如何达到一种契约的。并分析声誉效应和棘轮效应对激励效果产生的影响,通过显性和隐性的激励来观察对零售商是否有作用,并且观察作用的大小。     

非对称信息条件下的企业经营者激励契约设计

由于信息不对称,企业董事会不能观测到企业经营者工作的努力水平,因此,企业董事会需要对企业经营者进行激励。本文探讨了将能力系数和市场调研成本引入最优激励契约模型,给出了相应的最优风险激励系数和代理成本,并分析了各因素对它们的影响。通过“标尺竞争”可以提高激励强度,降低代理成本,增强激励的有效性。     

Interim correlated rationalizability in infinite games

In a Bayesian game, assume that the type space is a complete, separable metric space, the action space is a compact metric space, and the payoff functions are continuous. We show that the iterative and fixed-point definitions of interim correlated rationalizability (ICR) coincide, and ICR is non-empty-valued and upper hemicontinuous. This extends the finite-game results of Dekel et al. (2007), who introduced ICR. Our result applies, for instance, to discounted infinite-horizon dynamic games.     

All-Units Discounts in Retail Contracts

All-units discounts in retail contracts refer to discounts that lower a retailer's wholesale price on every unit purchased when the retailer's purchases equal or exceed some quantity threshold. These discounts pose a challenge to economic theory because it is difficult to understand why a manufacturer ever would charge less for a larger order if its intentions were benign. In this paper, we show that all-units discounts may profitably arise absent any exclusionary motive. All-units discounts eliminate double marginalization in a complete information setting, and they extract more profit than would a menu of two-part tariffs in the standard incomplete information setting with two types of buyers. All-units discounts may improve or may reduce welfare (relative to menus of two-part tariffs) depending on demand parameters .     

Observable Contracts as Commitments: Interdependent Contracts and Moral Hazard

A large literature examines the use of observable and unrenegotiable agency contracts as commitments. These analyses generally impose an ad hoc restriction that contracts cannot be contingent on one another. I relax this restriction and obtain a folk theorem. Unlike earlier folk theorems in this area, the present result applies to agency relationships that have hidden-action problems. Using an example, I also demonstrate that there are settings in which interdependent contracts support a strictly larger set of equilibrium outcomes than do independent contracts. The result highlights the critical need for careful thought about restrictions placed on the set of feasible contracts.     

Option Contracts in Supply Chains

This paper considers optimal contracts in supply chains that consist of   n ≥ 2  firms and face a potential investment hold-up problem. We show that option contracts may solve the incentive problems. First, we provide case-study evidence for the use of option contracts in the semiconductor industry. As our second contribution, we generalize the earlier option contract approach by introducing continuous quantities. Third, we extend the setting to n parties. For long supply chains, the first-best allocation can be achieved if there is a particular order of renegotiations .     

组织中心理契约的变化——当代人力资源管理面对的挑战

近年来,由于全球化竞争越来越激烈,以及员工方面期望的变化,界定员工与组织之间关系的心理契约也相应发生了巨大变化.传统心理契约的核心内容--员工努力工作、听从指挥并忠于组织,企业给员工提供合理的工作条件和长久的工作保障--越来越受到冲击和挑战,而一些新的内容,如对于灵活性、公正性、自我依赖性、工作丰富化的要求.在心理契约中所占比重越来越大.那么,在竞争全球化、企业结构重组、人员精简、不断变革的大环境下.当那些传统上给员工提供的工作安全感和稳定感不再存在时,如何开发和维持员工的承诺.如何管理员工的心理契约?我们首先阐述在新的社会一经济环境中,新型心理契约具有什么样的内容和特点.进而提出人力资源管理措施应该做出哪些方面的调整.     

Contracts with Wishful Thinkers

In a setting with a wishful thinking agent and a realistic principal, the paper studies how incentive contracts should be designed to control for both moral hazard and self‐deception. The properties of the contract that reconcile the agent with reality depend on the weight the agent attaches to anticipatory utility. When this is small, principal and agent agree on full recollection. For intermediate values the principal bears an extra cost to make the agent recall bad news. For large weights, the principal gives up on inducing signal recollection. We also extend the analysis to the case in which the parameter of anticipatory utility is private information.     

Contracts and on-the-job search

The paper studies a matching model with on-the-job search, transferable utility and heterogeneous agents. Matched agents can set the conditions under which a given match can be dissolved. It is shown that matched agents use sign-off fees to extract all capital gains from trade when a third agent is contacted. In equilibrium, this redistributes wealth towards less able individuals, reduces the likelihood that any given match will be rejected and, given the conditions, it yields efficiency. Although externalities arise when a match is formed and when turnover occurs, the decentralized outcome is efficient when the production function is sub-modular and the difference in abilities is big enough. The results obtained may provide theoretical support for the type of contracts used in some markets, such as sports markets.     

中期财务报告准则的比较研究

为提高上市公司会计信息质量，更好地保护投资者利益，2001年11月，财政部发布了《企业会计准则——中期财务报告》。鉴于美国是实行中期报告制度最早的国家，其制度也相对完善，本文拟将我国中期财务报准则同美国的相关准则及国际会计准则IAS34作粗浅的比较分析。通过比较分析，借鉴国外准则之长处，有利于推动我国中期报告理论和实务的发展。     

The Role of Debt in Procurement Contracts

This paper develops a theory of capital structure based on the attempts of a firm to alleviate a holdup problem that arises in its bilateral relationship with a buyer. It is shown that by issuing debt to outsiders, the firm can improve its ex post bargaining position vis-a-vis the buyer and capture a larger share of the ex post gains from trade. Debt, however, is costly because the buyer may find the required price too high and refuse to trade. Since debt raises the payoff of claimholders, it strengthens the firm's incentive to make relationship-specific investments, and therefore alleviates the well-known underinvestment problem. A comparative static analysis yields a number of testable hypotheses regarding the firm's financial strategy.     

Optimal Debt Contracts with Renegotiation

This paper sutudies the role of debt in committing a seller not to trade at a low price. We consider a discrete-time finite-horizon buyer–seller relationship. The seller makes an upfront relationship-specific investment, which is financed with debt. Debt then is repaid gradually to mitigate the hold-up risk. Even though debt is renegotiable, under the assumption that with a small probability renegotiation may fail and may lead to inefficient liquidation, debt still can be used as a commitment device. We solve for renegotiation proof dynamic debt contracts that are optimal for the seller and show that debt is repaid over the entire course of the relationship with declining repayments .