Hierarchic contracting
نویسندگان
چکیده
We analyze the contracting structure in a moral hazard setting with several agents where output is produced jointly and is the only contractible variable. Since the salary of each agent is a function of all agents efforts, a positive externality arises between them. This externality is not internalised by a centralised structure where the principal contracts directly with each agent. Instead, we find that a hierarchic structure (i.e. the delegation of "contracting rights" from the principal to the agents) internalises the externality by making agents "residual claimants". Consequently, the second best situation can be improved upon just by changing the contracting structure of the principal-agents relationship. The analysis is relevant to the literature on decentralisation, outsourcing, subcontracting and intra-firm organization. JEL Classification: D80, J30, L22, M12
منابع مشابه
Composition of hierarchic default specifications
The main contribution of this work has been the establishment of an institution independent theory of composition of hierarchic specifications. Hierarchic specifications consist of formulas (“defaults”) from an underlying logic (institution), organized by priority levels (related by a partial order). These formulas can be defeated when in contradiction with more reliable information (at more im...
متن کاملFull Hierarchic Versus Non-Hierarchic Classification Approaches for Mapping Sealed Surfaces at the Rural-Urban Fringe Using High-Resolution Satellite Data
Since 2008 more than half of the world population is living in cities and urban sprawl is continuing. Because of these developments, the mapping and monitoring of urban environments and their surroundings is becoming increasingly important. In this study two object-oriented approaches for high-resolution mapping of sealed surfaces are compared: a standard non-hierarchic approach and a full hier...
متن کاملHierarchic Voronoi skeletons
Robust and time-efficient skeletonization of a (planar) shape, which is connectivity preserving and based on Euclidean metrics, can be achieved by first regularizing the Voronoi diagram (VD) of a shape’s boundary points, i.e., by removal of noise-sensitive parts of the tessellation and then by establishing a hierarchic organization of skeleton constituents . Each component of the VD is attribut...
متن کاملHierarchic Computations in Geometric Space—Showing Sharp Diffraction in Quasicrystals
A quasi-structure factor method is used to show how sharp diffraction patterns are produced by aperiodic quasicrystals. Icosahedral symmetry is described for the tensor rank 3 solids with edgesharing unit cells that are pentagonally close packed in hierarchic structures having a geometric reciprocal lattice. The hierarchic symmetry replaces translational symmetry in crystal diffraction. Details...
متن کاملA software system for multi-level hierarchic Markov processes
A general software system for construction, editing and optimization of Markov decision processes ranging from traditional models and hierarchic Markov processes to multi-level hierarchic processes is presented. A short description of the system is given and the facilities are illustrated through a sow model defined as a 3-level hierarchic Markov process combining decisions on two time scales. ...
متن کامل