Borrowing Constraint as an Optimal Contract
نویسندگان
چکیده
منابع مشابه
Incompleteness as a Constraint in Contract Design∗
We develop a model that encompasses both the incomplete contracts that are used in practice and the idealized complete contracts that address all contingencies. The objectives of the paper are to (i) examine the extent of the inefficiency caused by the constraint of contractual incompleteness; (ii) to identify properties of agents’ preferences that determine whether or not incompleteness causes...
متن کاملDelegation of Authority as an Optimal (In)complete Contract
Delegation of Authority as an Optimal (In)complete Contract The present paper aims to contribute to the literature on the foundations of incomplete contracts by providing conditions under which simple delegation of authority is the solution to the complete-contracting problem of the parties. We consider a hold-up framework where both parties profit from an investment that raises the value of an...
متن کاملProfit-Sharing as the Optimal Wage Contract
This paper analyses the optimal wage contract when firms face demand uncertainty and workers care about employment stability. Workers choose the firm that offers the highest utility taking into account the future lay-off probabilities; firms choose the wage contract that maximises the residual share of the gains from production. For risk-neutral workers this occurs with any efficient wage contr...
متن کاملConstraint-Based Models of Lexical Borrowing
Linguistic borrowing is the phenomenon of transferring linguistic constructions (lexical, phonological, morphological, and syntactic) from a “donor” language to a “recipient” language as a result of contacts between communities speaking different languages. Borrowed words are found in all languages, and—in contrast to cognate relationships—borrowing relationships may exist across unrelated lang...
متن کاملLimited observability as a constraint in contract design
Limited observability is the assumption that economic agents can only observe a finite amount of information. Given this constraint, contracts among agents are necessarily finite and incomplete in comparison to the ideal complete contract that we model as infinite in detail. We consider the extent to which finite contracts can approximate the idealized complete contracts. The objectives of the ...
متن کاملذخیره در منابع من
با ذخیره ی این منبع در منابع من، دسترسی به آن را برای استفاده های بعدی آسان تر کنید
ژورنال
عنوان ژورنال: SSRN Electronic Journal
سال: 2009
ISSN: 1556-5068
DOI: 10.2139/ssrn.1620042