Arbeitspapier
Globally incentives-compatible contracts under weak third party enforcement
We explore how the structure of incentives contracts adjusts to the creation of quasi-rents by the delivery of certain types of contract obligations under weak third party enforcement (TPE). The situation invites quasi-rent appropriation by some contractor. We focus on possible ex-post opportunism by the principal. We propose the concept of globally incentives compatible (GIC) contracts, where no contractor has the incentive to deviate ex-post from the obligations set ex-ante in the contract. We model optimal appropriation by the principal and the response of the agent when the contract is not GIC. The conditions that guarantee GIC for principal-agent the incentives contracts under weak TPE are investigated.
- Language
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Englisch
- Bibliographic citation
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Series: UPSE Discussion Paper ; No. 2005,07
- Classification
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Wirtschaft
- Subject
-
global incentives compatibility
quasi-rent
third party enforcement incentives contract
Vertragstheorie
Anreizvertrag
Prinzipal-Agent-Theorie
- Event
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Geistige Schöpfung
- (who)
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Fabella, Raul V.
- Event
-
Veröffentlichung
- (who)
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University of the Philippines, School of Economics (UPSE)
- (where)
-
Quezon City
- (when)
-
2005
- Handle
- Last update
-
10.03.2025, 11:42 AM CET
Data provider
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Object type
- Arbeitspapier
Associated
- Fabella, Raul V.
- University of the Philippines, School of Economics (UPSE)
Time of origin
- 2005
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