Author: Hsin-Yu TsengPublisher:
ISBN:
Category : Health insurance
Languages : en
Pages : 262
Book Description
Three Essays on Empirical Applications of Contract Theory
Author: Hsin-Yu TsengPublisher:
ISBN:
Category : Health insurance
Languages : en
Pages : 262
Book Description
Three Essays on Contract Theory and Applications
Author: Sunjoo HwangPublisher:
ISBN:
Category :
Languages : en
Pages : 286
Book Description
This dissertation consists of three essays. The first essay examines a general theory of information based on informal contracting. The measurement problem--the disparity of true and measured performances--is at the core of many failures in incentive systems. Informal contracting can be a potential solution since, unlike in formal contracting, it can utilize a lot of qualitative and informative signals. However, informal contracting must be self-enforced. Given this trade-off between informativeness and self-enforcement, I show that a new source of statistical information is economically valuable in informal con- tracting if and only if it is sufficiently informative that it refines the existing pass/fail criterion. I also find that a new information is more likely valuable, as the stock of existing information is large. This information theory has implications on the measurement problem, a puzzle of relative performance evaluation and human resources management. I also provide a methodological contribution. For tractable analysis, the first-order approach (FOA) should be employed. Existing FOA-justifying conditions (e.g. the Mirrlees-Rogerson condition) are so strong that the information ranking condition can be applied only to a small set of information structures. Instead, I find a weak FOA- justifying condition, which holds in many prominent examples (with multi- variate normal or some of univariate exponential family distributions). The second essay analyzes the effectiveness of managerial punishments in mitigating moral hazard problem of government bailouts. Government bailouts of systemically important financial or industrial firms are necessary ex-post but cause moral hazard ex-ante. A seemingly perfect solution to this time-inconsistency problem is saving a firm while punishing its manager. I show that this idea does not necessarily work if ownership and management are separated. In this case, the shareholder(s) of the firm has to motivate the manager by using incentive contracts. Managerial punishments (such as Obama's $500,000 bonus cap) could distort the incentive-contracting program. The shareholder's ability to motivate the manager could then be reduced and thereby moral hazard could be exacerbated depending on corporate governance structures and punishment measures, which means the likelihood of future bailouts increases. As an alternative, I discuss the effectiveness of shareholder punishments. The third essay analyzes how education affect workers' career-concerns. A person's life consists of two important stages: the first stage as a student and the second stage as a worker. In order to address how a person chooses an education-career path, I examine an integrated model of education and career-concerns. In the first part, I analyze the welfare effect of education. In Spence's job market signaling model, education as a sorting device improves efficiency by mitigating the lemon market problem. In my integrated model, by contrast, education as a sorting device can be detrimental to social welfare, as it eliminates the work incentive generated by career-concerns. In this regard, I suggest scholarship programs aimed at building human capital rather than sorting students. The second part provides a new perspective on education: education is job-risk hedging device (as well as human capital enhancing or sorting device). I show that highly risk-averse people take high education in order to hedge job-risk and pursue safe but medium-return work path. In contrast, lowly risk-averse people take low education, bear job-risk, and pursue high-risk high-return work path. This explains why some people finish college early and begin start-ups, whereas others take master's or Ph.D. degrees and find safe but stable jobs.
Three Essays in Contract Theory
Author: Bernard CaillaudEssays on Contract Design and Incentive Provision
Author: Eva I. Hoppe-FischerPublisher: Springer
ISBN: 3658241330
Category : Business & Economics
Languages : en
Pages : 211
Book Description
Contract theory, which emphasizes the importance of unverifiable actions and private information, has been a highly active field of research in microeconomics in the last decades. This thesis is divided into two parts. Part I consists of three chapters that study contract-theoretic models which are motivated by the classic procurement problem of a principal who wants an agent to deliver a certain good or service. In such models it is typically assumed that decision makers are interested in their own monetary payoffs only. Moreover, they have unlimited cognitive abilities and behave in a perfectly rational way. Yet, in practice people often do not behave this way. While empirical research is very difficult in contract theory, laboratory experiments have recently turned out to be an important source of data. In Part II, three experimental studies are presented that investigate contract-theoretic problems brought up in Part I.
Three Essays on Bargaining and Contract Theory
Author: Martina Nikolaeva GogovaPublisher:
ISBN:
Category :
Languages : en
Pages : 171
Book Description
Three Essays in the Theory of Contracts and Organizations
Author: Fausto PanunziThree Essays on Contract Theory
Author: Essays on Experimental Economics and Behavioral Contract Theory
Author: Stephen LeiderPublisher:
ISBN:
Category :
Languages : en
Pages : 374
Book Description
This dissertation consists of three essays using experiments and theory to apply behavioral insights to questions of contract theory and organizational economics. The first essay (co-authored with Judd Kessler) argues that an important aspect of incomplete contracts is their role in establishing a norm for the transaction or relationship, which increases the efficiency of agents' actions. We demonstrate experimentally that unenforceable handshake agreements within a contract can substantially increase the efficiency of subjects' actions, particularly in games with strategic complements. When there is a handshake agreement, adding an additional enforceable clause to the contract often does not further increase efficiency in our experiment. The second essay (co-authored with Florian Englmaier) analyzes a principal-agent setting where the agent has reciprocity preferences (the intrinsic desire to repay generosity). We identify the optimal contract, which typically includes both monetary performance-pay incentives as well as excess rents to induce gift exchange incentives. We then identify several organizational characteristics that can enhance or diminish the efficacy of reciprocity-based incentives. In the third essay (co-authored with Florian Englmaier) we test experimentally a key prediction of our general theory: the value to the principal of the agent's output (relative to the effort cost) should influence the agent's willingness to reciprocate generous wage contracts. Our results confirm this prediction, as well as providing additional evidence that agent's effort decisions are motivated by reciprocity.
The Theory of Contract Law
Author: Peter BensonPublisher: Cambridge University Press
ISBN: 0521640385
Category : Law
Languages : en
Pages : 365
Book Description
Essays addressing a variety of issues in the theory and practice of contract law.
Author: Chunto Tso