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(DP 2005-07) Globally Incentives-Compatible Contracts Under Weak Third Party Enforcement
UPSE Discussion Papers
View Archive Info| Field | Value | |
| Title |
(DP 2005-07) Globally Incentives-Compatible Contracts Under Weak Third Party Enforcement
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| Creator |
Fabella, Raul V.
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| Description |
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.
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| Publisher |
UPSE Discussion Papers
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| Contributor |
—
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| Date |
2010-08-26
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| Type |
info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion Peer-reviewed Article |
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| Format |
application/pdf
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| Identifier |
http://www.econ.upd.edu.ph/dp/index.php/dp/article/view/125
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| Source |
UPSE Discussion Papers; 2005
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| Language |
eng
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| Relation |
http://www.econ.upd.edu.ph/dp/index.php/dp/article/view/125/123
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