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on Contract Theory and Applications |
| By: | Richard Baron (Univ Lyon, UJM Saint-Etienne, GATE UMR 5824, F-42023 Saint- Etienne, France); Magali Chaudey (Univ Lyon, UJM Saint-Etienne, GATE UMR 5824, F-42023 Saint- Etienne, France) |
| Abstract: | This paper is interested in the analysis of Blockchains and Smart-contracts applied to inter-firms relationships, in particular the franchise networks. After defining the Blockchain technology and the Smart-contract as a particular type of contract stored in blockchains, we question the theory of contracts and its conception(s) of transactions, information asymmetries, firm or inter-firm relations. To better understand the challenges of blockchain for franchise networks and identify opportunities for implementation in these networks, we present some relevant applications of this technology. We identify different ways where blockchain technology could improve the network management and therefore their performance: the supply-chain, the brand-name protection, security and transparency in the payment of fees and royalties, access to reliable information via an oracle. |
| Keywords: | Blockchain, Smart-Contract, Transaction cost, Network, Franchise |
| JEL: | D86 L14 L81 O33 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:gat:wpaper:1917&r=all |
| By: | Le Coq, Chloe (Stockholm Institute of Transition Economics); Schwenen, Sebastian (Technical University of Munich (School of Management)) |
| Abstract: | We study the use of fi nancial contracts as bid-coordinating device in multi-unit uniform price auctions. Coordination is required whenever firms face a volunteer's dilemma in pricing strategies: one firm (the "volunteer") is needed to increase the market clearing price. Volunteering, however, is costly, as inframarginal suppliers sell their entire capacity whereas the volunteer only sells residual demand. We identify conditions under which signing financial contracts solves this dilemma. We test our framework exploiting data on contract positions by large producers in the New York power market. Using a Monte Carlo simulation, we show that the contracting strategy is payoff dominant and provide estimates of the benefits of such strategy. |
| Keywords: | Auctions; Coordination; Volunteers dilemma; Forward markets; power market |
| JEL: | D21 D44 L41 |
| Date: | 2019–04–24 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:hasite:0047&r=all |
| By: | Vitezslav Titl; Kristof De Witte; Benny Geys |
| Abstract: | Firms’ political donations can induce distortions in the allocation of public procurement contracts. In this article, we employ an advanced non-parametric efficiency model to study the public sector (cost) efficiency implications of such distortions. Using a unique dataset covering the Czech regions over the 2007-2014 period, we find that the efficiency of public good provision is lower when a larger share of public procurement contracts is awarded to firms donating to the party in power (‘party donors’). We link this efficiency difference to two underlying mechanisms: i.e. shifts in procurement contract allocations from firms with previous procurement experience to party donors, and the use of less restrictive allocation procedures that benefit party donors. |
| Keywords: | political connections, non-parametric efficiency analysis, benefit-of-the-doubt |
| JEL: | H57 D72 C23 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_7591&r=all |
| By: | Rahul Deb; Mallesh M. Pai; Maher Said |
| Abstract: | We develop a dynamic adverse selection model where a career-concerned buy-side analyst advises a fund manager about investment decisions. The analyst's ability is privately known, as is any information she learns over time. The manager wants to elicit information to maximize fund performance while also identifying and retaining high-skill analysts. We characterize the optimal dynamic contract, show that it has several features supported by empirical evidence, and derive novel testable implications. The fund manager's optimal contract both maximizes the value of information and screens out low-skill analysts by incentivizing the analyst to always provide honest advice. |
| Keywords: | buy-side analysts, career concerns, analyst recommendations, forecasting, dynamic mechanism design |
| JEL: | D82 D83 D86 G11 G14 G23 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:ste:nystbu:19-01&r=all |