Product Durability and Moral Hazard

Previous durability studies conclude that a monopolist that sells output without any commitment ability will tend to produce output with lower durability than a monopolist that rents output. This paper demonstrates that this conclusion depends critically on the degree of moral hazard (possible damage to output) faced by renting firms. When moral hazard abuse or neglect is introduced in a durability model it is shown that a renter may manufacture output with lower durability than an uncommitted seller reversing the conventional obsolescence result. However, the analysis indicates that, unlike the seller's commitment problem, the presence of moral hazard in rental markets does not cause a failure of the independence of durability and industry structure.     

Moral Hazard in Home Equity Conversion

Home equity conversion as presently constituted or proposed usually does not deal well with the problem of moral hazard. Once homeowners know that the risk of poor market performance of their homes is borne by investors, they have an incentive to neglect to take steps to maintain the homes values. They may thus create serious future losses for the investors. A calibrated model for assessing this moral-hazard risk is presented that is suitable for a number of home equity conversion forms: (1) reverse mortgages, (2) home equity insurance, (3) shared-appreciation mortgages, (4) housing partnerships, (5) shared-equity mortgages and (6) sale of remainder interest. Modifications of these forms involving real estate price indexes are proposed that might deal better with the problem of moral hazard.     

The Neoclassical Firm Under Moral Hazard

We develop a model of the neoclassical firm under moral hazard with endogenous capital and employment and perfectly competitive capital, labor and product markets. We assume that effort becomes harder to measure as the firm gets larger and the exogenous parameters are affiliated. The model explains why incentives decline but wages rise with firm size, the mixed evidence on the risk-reward tradeoff, and the positive correlation between wages and profits. In the long run, incentives are increasing in risk via endogenous capital. Finally, the model makes novel predictions about the relationship between incentives and labor market conditions.     

Moral Hazard and the Market for Used Automobiles

I examine a moral hazard problem faced by the owners offleet automobiles. Because fleet vehicles are generally notdriven by their owners, the drivers of these vehicles do not bearall of the costs of either neglecting or abusing the vehicle, causingthese vehicles to depreciate faster than owner-operated vehicles. Empirical estimates show that, after controlling for mileage, fleetvehicles depreciate approximately ten to thirteen percent fasterper-year than owner-driven vehicles. I argue that at least partof this increased depreciation is attributable to moral hazard.     

医疗保险市场中道德风险分析及其防范措施

目的探讨有效控制医疗保险领域的道德风险的方法与途径。方法从经济学的角度分析医疗保险市场中道德风险的现状成因,分别得出在医疗保险市场和医疗市场遏制道德风险的措施。结论通过对患者的监督与激励,建立起信息系统和信用账户制度,解决信息不对称问题,调整支付制度和实行医药分家,从根本上消除道德风险,控制医疗费用的不合理上涨。     

The Termination of Commercial Mortgage Contracts through Prepayment and Default: A Proportional Hazard Approach with Competing Risks

This article examines the factors driving the borrower's decision to terminate commercial mortgage contracts with the lender through either prepayment or default. Using loan–level data, we estimate prepayment and default functions in a proportional hazard framework with competing risks, allowing us to account for unobserved heterogeneity. Under a strict definition of mortgage default, we do not find evidence to support the existence of unobserved heterogeneity. However, when the definition of mortgage default is relaxed, we do find some evidence of two distinctive borrower groups. Our results suggest that the values of implicit put and call options drive default and prepayment actions in a nonlinear and interactive fashion. Prepayment and default risks are found to be convex in the intrinsic value of call and put options, respectively. Consistent with the joint nature of the two underlying options, high value of the put/call option is found to significantly reduce the call/put risk since the borrower forfeits both options by exercising one. Variables that proxy for cash flow and credit conditions as well as ex post bargaining powers are also found to have significant influence upon the borrower's mortgage termination decision.     

产品分成合同模式和回购合同模式比较分析

在国际油气勘探开发合作项目中，资源国与承包商之间的合作方式主要有租让制和合同制，合同制包括产品分成合同（PSC）、服务合同（Service)和回购合同（Buy Back)等几种，其中油气产品分成合同模式较为普遍，新兴的回购合同模式在中东一些国家得到应用。产品分成合同与回购合同在核心内容、追求目标和风险方面存在不同，资源国政府与承包商选择合同模式的着眼点不同，构成了对合同模式的主要争议。油气田勘探开发项目，涉及长期、大宗的投资，分析回购合同模式和产品分成合同模式的适用性和各自的特点，对于从事国际油气合作项目，追求投资回报的最大化，具有一定的指导意义。     

论隐性课程与高校德育环境的优化

从本质上讲,隐性课程是一种价值性影响,各种隐性课程因素以间接和内隐的形式,曲折地反映着社会和学校德育的内容和要求,潜移默化地对受教育者施加思想、政治和道德影响。因此,重视并充分运用隐性课程因素促进学生个性的全面发展,是高校优化德育环境的重要内容。     

Decentralized Wage Formation in Sweden

Recent Swedish collective bargaining agreements have incorporated provisions for local pay review talks and opportunities for individuals to negotiate their own wages. Using trade union data, we show that members who participate in local pay review talks and members who negotiate their own wages have significantly higher monthly wages than those who do not. Pay decentralization either improves an individual's bargaining position or attracts more productive trade union members. Either way, trade union wage policies to increase individual‐level wage variance are achieving their intended effects.     

Innovation in Labor Contracts: On the Adoption of Profit Sharing inCanadian Labor Contracts

I present a model in which I show that labor contracts with wages indexed to prices have longer optimal contract lengths and therefore are more likely to adopt performance-related pay. There is empirical support for these predictions in Canadian collective-bargaining agreements. Contract durations are longer in indexed contracts. Performance-related pay is more than twice as likely to be adopted and present in indexed contracts and more likely to be adopted in contracts with longer durations.     

Contracts and Quality in the California Winegrape Industry

We analyze the relationship between product quality and contractingchoices using the results of a survey of California winegrape growers.Growers who produce high-quality grapes are more likely to use formalwritten contracts than are growers who produce low-quality grapes.Written contracts for high-quality grapes are more likely to includeprovisions regarding the production process, while written contractsfor low-quality grapes are more likely to include explicit financialincentives for sugar content and other product attributes.     

Membership Participation and Centralized Control

The union faces severe economic and political problems: it is becoming increasingly expensive to perform important union functions, membership losses are difficult to replace, job mortality is high, firm size is small, membership income is modest, skill level is low, and the union has minority status in almost all of its industries. The policy response to financial pressure is to encourage members to volunteer to perform many union functions which the union can not otherwise afford. Policies supportive of this goal include supply of a broad array of services at union headquarters, insistence that members pay dues in person, insistence on meeting attendance, and emphasis on the steward and crew and the role of the experienced member. The political pressure is weakened union authority. Unusual heterogeneity among employers, occupations, and members, plus an unavoidably decentralized collective bargaining situation, present strong centrifugal tendencies. Major variations in occupation, skills, income level, union background, job security, and ethnic and cultural identification contribute to a diversity of interests and loyalties. A tendency for the membership to be clustered or differentiated by character of their employment also adds a potential threat of balkanization by local. The policy response to political pressure has been the effort to centralize authority and initiative. For example, the 1,000-member General Council has been granted almost unlimited governmental authority. The Council is the channel for downward communication flow; the related structuring, sequencing, and common agendas of all union meetings also keep initiative and authority at the Districtwide level. Additional centralizing aspects include the absence of constitutional restraints on leadership freedom of action; the lack of restraints from the international union; emphasis on crew and steward, rather than on local and local officer; the discouragement of electoral conflicts inherent in the application of the “majority rule”; the preferred ballot position of Districtwide candidates; the Districtwide vote required for the four “regional” leaders; and the offsetting of decentralized collective bargaining with an array of control devices. Meeting attendance, dues payments (without benefit of checkoff), and electoral participation are unusually high. However, volunteer offices are difficult to fill; experienced occupants are difficult to hold. There is little volunteer participation in organizing and collective bargaining and participation is way below the level prescribed by union policy pronouncements. Areas of inconsistency, if not conflict, exist between the two major strands of policy, i.e., encouragement of membership participation, on the one hand, and centralization of authority, on the other. Centralization makes it more difficult to involve members in union affairs. De-emphasis of the role of the local officer and organizer in favor of stewards and vice-presidents has minimized potential divisive influences, but at the cost of inhibiting volunteer leadership activity.     

Centralized and decentralized buying influences

This article empirically measures the effects of organizational separation on industrial buying in the commercial construction industry. It was reasoned that the relationship between organizations and their buying centers should depend on the separations between organizational buying units. Two types of organizational separation were measured— geographic separation and communication separation. Industrial sellers must relate selling effort to buying behavior and procedures. This study reports on how buying influence varies between firms that operate at various levels of organizational separation. The managerial implications of matching the pattern of buying influence with appropriate selling effort is presented.     

Zero Hours Contracts and Their Growth

This article studies the prevalence and nature of zero hours contracts (ZHCs) in the UK labour market. It is widely argued that the headline count of ZHC workers based on the Labour Force Survey historically underestimated the number of workers in ZHC jobs. Here, we argue that this likely continues to be the case, particularly if one considers other, similar, no-guaranteed-hours jobs alongside ZHCs. ZHC jobs and workers are heterogeneous, but ZHCs have become increasingly concentrated among young workers, full-time students, migrants, black and minority ethnic workers, in personal service and elementary occupations, and in the distribution, accommodation and restaurant sector over time. Compared to other forms of employment, median wages in ZHC jobs have also fallen. The most common prior labour market state for ZHC workers is non-ZHC employment, particularly part-time employment, with part of the reported growth in ZHCs driven by reclassification of existing employment relationships. Finally, we show that growth in public awareness of ZHCs contributed substantially to recent growth in reported ZHCs, particularly over the period 2013/14.     

Commuting and Congestion: A Simulation Model of a Decentralized Metropolitan Area

In this paper, a simulation model of commuting behavior in a metropolitan area with decentralized employment and congestion is developed. The model is used to explore the linkage between the dispersed land use patterns in U.S. cities and long commuting journeys which cause congestion and air pollution. The results show that increasing the number of suburban subcenters in a metropolitan area could reduce commuting by 15% to 50%. However, only about one quarter of total urban travel is for commuting. Therefore the reduction in total urban travel that could be expected to result from even drastic policy measures to decentralize employment would probably be low—perhaps as small as 5%. Data are also presented giving private versus social costs of commuting per mile in central cities and suburbs.     

Vertical Contracts and Downstream Entry*

We study the implications of different contractual forms in a market with an incumbent upstream monopolist and free downstream entry. We show that traditional conclusions regarding the desirability of linear contracts radically change when entry in the downstream market is endogenous rather than exogenous. By triggering more entry than two-part tariffs, wholesale price contracts can generate higher aggregate output, consumer surplus, and welfare. In light of this, the upstream monopolist may prefer to trade with wholesale price contracts as well as to give up part of its bargaining power when it is high.     

On Multitasking and Job Design in Relational Contracts*

We investigate job design problems in relational contracting environments with multitasking and an aggregated and distorted performance measurement. Compared to assigning all the tasks to a single agent, assigning the tasks to multiple agents mitigates misallocation of effort among the tasks but tightens the self-enforcing constraint. Consequently, task separation is optimal if and only if the discount factor is high. Some tasks may not be assigned to the agents at all under the optimal job design. When the principal provides explicit incentives as well, it may be the case that task bundling is suboptimal for any discount factor.     

Economic Efficiency and Political Capture in Public Service Contracts

We consider contracts for public transport services between a public authority and a transport operator. We build a structural endogenous switching model where the contract choice results from the combined effects of the incentivization scheme aimed at monitoring the operator's efficiency and the political agenda followed by the regulator to account for the voice of private interests. Our results support theoretical predictions as they suggest that cost‐plus contracts entail a higher cost for society than fixed‐price contracts but allow the public authority to leave a rent to a subset of individuals. Accounting for transfers to interest groups in welfare computations reduces the welfare gap between cost‐plus and fixed‐price regimes.