摘要:

Private information creates a cost of operating a hierarchy, which becomes larger as the hierarchical distance between the information source and the decision maker increases. When information about a firm's capabilities is dispersed among the individuals in the firm, production is inefficient even though everyone behaves rationally. Because hierarchies need rents in order to function, a firm with a long hierarchy may not be viable in a competitive industry.

ISSN:1058-6407    

DOI:10.1111/j.1430-9134.1995.00399.x

出版商:Blackwell Publishing Ltd    

年代:1995

数据来源: WILEY

摘要:

In a moral hazard setting, we model the fact that the agent may get private signals about the final outcome of his effort before the public realization of this outcome. Actions affect both the distribution of the outcome and the quality of the agent's private information. We compare simple contracts, based on output only, with revelation contracts, based on output and messages about signals. Revelation contracts give the agent some discretionary power during the course of the relationship; they are optimal if and only if lowering effort does not increase the quality of private information in the sense of Blackwell (1953). In the context of managerial compensation schemes, the revelation contracts we analyze can be viewed as allowing the agent to exercise an option on the final profits before the realization of these profits. The theory thus provides an alternative justification of the widespread use of stock options in managerial compensation schemes, as opposed to compensation schemes that rely only on salary, bonus, and (restricted) stock plans.

ISSN:1058-6407    

DOI:10.1111/j.1430-9134.1995.00427.x

出版商:Blackwell Publishing Ltd    

年代:1995

数据来源: WILEY

摘要:

A dynamic model of product rivalry is developed for a market in which firms choose price and advertising intensity. The model, a state‐space game, is implemented using data that consist of weekly price, sales, and promotional activity for four brands of saltine crackers sold by four chains of grocery stores in a small town. A number of questions can be asked of this data. First, is advertising predatory (merely changing market shares) or cooperative (shifting out market demand)? Second, are price and advertising own and cross‐strategic complements or substitutes? And finally, do investments in stocks of goodwill and in price reductions make firms tough and aggressive or soft and accommodat

ISSN:1058-6407    

DOI:10.1111/j.1430-9134.1995.00445.x

出版商:Blackwell Publishing Ltd    

年代:1995

数据来源: WILEY

摘要:

We examine the nature of incentive schemes between the principal and the risk‐neutral agent in the presence of the agent's limited liability and ex ante action choice. We consider alternative schemes when a simple rental contract is infeasible due to the limited liability of the agent and study the effectiveness of a performance bonus scheme in achieving the first‐best outcome. We also discuss some implications of such schemes in real practi

ISSN:1058-6407    

DOI:10.1111/j.1430-9134.1995.00477.x

出版商:Blackwell Publishing Ltd    

年代:1995

数据来源: WILEY

摘要:

Recent theories of vertical integration based on incomplete contracts assume perfect competition on at least one side of the market. As a result, the make‐or‐buy choice has no redistributive effect and will reflect efficiency considerations only. This paper introduces imperfect competition into an otherwise standard model of a vertical relationship with noncontractable specific investments. We assume that there are a finite number of potential input suppliers with private information about their costs. We first show that a monopoly buyer of such inputs will often prefer to own the seller's assets even though it would be more efficient for the seller's assets not to be so owned. We then show that an increase in the number of potential partners on either side of the market reduces this inclination towards vertical integration. With perfect competition on either side of the market, the make‐buy decision will reflect only efficiency considera

ISSN:1058-6407    

DOI:10.1111/j.1430-9134.1995.00491.x

出版商:Blackwell Publishing Ltd    

年代:1995

数据来源: WILEY

摘要:

This paper interprets private label marketing as a retailer instrument for overcoming the double‐marginalization problem inherent in the distribution of well‐known manufacturer brands. Retailers with some degree of market power carry private label substitutes for popular national brands in order to capture more profit from the vertical structures they share with brand manufacturers. The net effect of private label marketing is to improve the performance of distribution channels. After presenting a formal model and deriving analytical results, the paper gathers some empirical evidence that supports these resu

ISSN:1058-6407    

DOI:10.1111/j.1430-9134.1995.00509.x

出版商:Blackwell Publishing Ltd    

年代:1995

数据来源: WILEY