Double-Sided Moral Hazard and the Nature of Share Contracts
نویسندگان
چکیده
منابع مشابه
Double-Sided Moral Hazard, Efficiency Wages and Litigation
We consider a moral-hazard problem in a principal-agent relationship. Each party can renege on the signed contract since verification of effort is costly and subject to uncertainty. It is shown that ex-post litigation can restore incentives of the agent. Moreover, when the litigation can be settled by the parties the pure threat of using the legal system may suffice to implement the first-best ...
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We explore in this paper the design of optimal share contracts when there is a double moral hazard, one on inputs exclusively provided by the agent (such as effort) and the other in reporting the level of output to be shared with the principal, and when there is a social efficiency cost to under-reporting. The optimal contract is second best in that it allows for residual moral hazard in both e...
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In many supply chains consumption of indirect materials, sold by a supplier to a customer for use in her production process, can be reduced by efforts exerted by either party. Since traditional supply contracts provide no incentive for the supplier to exert such effort, shared-savings contracts have been proposed as a way to improve incentives in the channel, leading to more efficient effort ch...
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ژورنال
عنوان ژورنال: The RAND Journal of Economics
سال: 1995
ISSN: 0741-6261
DOI: 10.2307/2556017