nep-cta New Economics Papers
on Contract Theory and Applications
Issue of 2017‒05‒07
two papers chosen by
Guillem Roig
University of Melbourne

  1. Utilities Included: Split Incentives in Commercial Electricity Contracts By Katrina Jessoe; Maya M. Papineau; David Rapson
  2. Empirical Models of Firms and Industries By Victor Aguirregabiria; Margaret Slade

  1. By: Katrina Jessoe (Department of Agricultural and Resource Economics, University of California, Davis); Maya M. Papineau (Department of Economics, Carleton University); David Rapson (Department of Economics, University of California, Davis)
    Abstract: The largest decile of commercial electricity customers comprises half of commercial sector electricity usage. We quantify a substantial split incentives problem that exists when these large firms are on electricity-included property lease contracts. Using exogenous variation in weather shocks, we show that customers on tenant-paid contracts use 6-14% less electricity in summer months. The policy implications are promising. Nationwide energy savings from aligning incentives for the largest 10% of commercial customers exceeds analogous savings from the entire residential electricity sector. It is also cost-effective: switching to tenant-paid contracts via sub-metering has a private payoff period of under one year.
    Keywords: Electricity; Principal-Agent Problem; Contracts
    JEL: D22 L14 Q51
    Date: 2017–05–01
    URL: http://d.repec.org/n?u=RePEc:car:carecp:17-07&r=cta
  2. By: Victor Aguirregabiria; Margaret Slade
    Abstract: We review important developments in Empirical Industrial Organization (IO) over the last three decades. The paper is organized around six topics: collusion, demand, productivity, industry dynamics, interfirm contracts, and auctions. We present models that are workhorses in empirical IO, and describe applications. For each topic, we discuss at least one empirical application using Canadian data.
    Keywords: Empirical Industrial Organization; Collusion; Demand for differentiated products; Production functions; Dynamic structural models; Interfirm contracts; Empirical auction models
    JEL: C57 L10 L20 L30 L40 L50
    Date: 2017–04–25
    URL: http://d.repec.org/n?u=RePEc:tor:tecipa:tecipa-580&r=cta

This nep-cta issue is ©2017 by Guillem Roig. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at http://nep.repec.org. For comments please write to the director of NEP, Marco Novarese at <director@nep.repec.org>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.