Governance of Adjustments*
نویسنده
چکیده
Even in a modern economy, a large fraction of trades are not instantaneous one-shot deals. Some trades are packaged in streams, and others are executed over a period of time. Illustrative examples include construction projects, ongoing parts supply, and employment relationships. The passage of time creates a possible demand for adjustments, as the arrival of new information makes it desirable to change trades in midstream. The present article proposes a research program to compare game forms as alternative ways to govern these adjustments. To keep the exposition simple and illustrate a number of dimensions on which the performance of alternative game forms may vary, I develop four examples of the program. All the examples compare the same three game forms: (1) negotiating adjustments as they come up, (2) reaching advance consensus about how to handle each type of adjustment, and (3) having one party agree to leave the stipulation of adjustments to the other. The first two game forms are not surprising, but the third may be. However, there are many examples in which interested parties cede decision rights to others. A stark illustration is that the U.S. electorate allows the president to make decisions on its behalf instead of calling a vote on every issue. An obvious reason
منابع مشابه
MIT Sloan School of Management Working Paper 4412 - 03 January 2003 Governance of Adjustments
The article proposes a research program to compare game forms in terms of their ability to govern ex post adjustments to ex ante contracts. The comparisons can be based on direct implementation-costs or the extent to which desirable adjustments are not implemented. In several examples of the program, we compare three game forms: negotiation over each adjustment, ex ante price lists, and implici...
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