This paper studies optimal production subsidy in a mixed duopoly with separation between ownership and management. Although many existing literature shows that the first best production allocation is achieved under several economic environments (so-called irrelevance result), we find that this result holds in the following two cases. (1) The owners simultaneously/sequentially decide their sales...

I show in this paper that incomplete contracts affect a firm’s decision about serving foreign customers through exports or local sales from an affiliated plant. When contracts between two agents within a firm are too costly to write, the share of multinational firms may be higher or lower compared to a world without contractual frictions. Incomplete contracts also provide a novel explanation fo...

This paper describes the prototype version of Sales Contractor, a computer system which produces standard or variable contracts for the sale of goods. Although built using an expert system shell, Sales Contractor operates as a decision support system, advising the user about which clauses to include in the contract, but leaving the final choice to him/her. Sales Contractor represents the first ...

Due to its complex nature, after-sales service support for systems such as aircraft engines is commonly outsourced to the vendor. A key input to contracting for such support is system reliability. When producttechnology is new, the vendor often knows more about reliability than the buyer, potentially leading to contractual inefficiencies. This paper examines the role of after-sales contracts as...

Revenue-sharing contracts are a kind of mechanism aimed at improving performance and achieving precise coordination of the supply chain. In this paper, we analyse and develop the revenue-sharing contract model of the three-level supply chain with distributor’s sales effort dependent demand. The paper discusses the impacts of sales efforts on coordination of the supply chain and explains the rea...