Relational Contracts in Moral Hazard with Subjective Performance Measures

영문 제목
Relational Contracts in Moral Hazard with Subjective Performance Measures
저자
이명기
출판년도
2007-05
초록
This paper analyzes optimal self-enforcing termination contracts under the assumptions that the agent (e.g. grower) must make relationship-specific investments prior to contracting, that the principal (e.g. integrator or processor) has ex post full bargaining power due to monopsony power, and that performance is subjectively measured. In the optimal self-enforcing termination contract, the principal motivates the agent by rewarding the agent through continuation of the relationship for high levels of performance and penalizes the agent through termination for low levels of performance. Performance bonuses are no longer used. When the agent must make relationship-specific investment, the principal may not pay positive rents. This implies that the relationship-specificity of investment increases the principal's expected payoff, whereas it decreases the agent's.
This paper analyzes optimal self-enforcing termination contracts under the assumptions that the agent (e.g. grower) must make relationship-specific investments prior to contracting, that the principal (e.g. integrator or processor) has ex post full bargaining power due to monopsony power, and that performance is subjectively measured. In the optimal self-enforcing termination contract, the principal motivates the agent by rewarding the agent through continuation of the relationship for high levels of performance and penalizes the agent through termination for low levels of performance. Performance bonuses are no longer used. When the agent must make relationship-specific investment, the principal may not pay positive rents. This implies that the relationship-specificity of investment increases the principal's expected payoff, whereas it decreases the agent's.
목차
I. IntroductionII. Model AssumptionsIII. Optimal Termination ContractsIV. Conclusion and Implication
I. IntroductionII. Model AssumptionsIII. Optimal Termination ContractsIV. Conclusion and Implication
서지인용
page. 19 - 46
발행처
한국농촌경제연구원
주제어
relational contract; subjective performance measures; relationship-specific investment; moral hazard; termination contract; relational contract; subjective performance measures; relationship-specific investment; moral hazard; termination contract
발간물 유형
KREI 논문
URI
http://repository.krei.re.kr/handle/2018.oak/18678
Appears in Collections:
학술지 논문 > 농촌경제 / JRD
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