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on Contract Theory and Applications |
| By: | De Rassenfosse, Gaétan; Decarolis, Francesco; Iossa, Elisabetta; Leonardo Giuffrida, Leonardo; Mollisi, Vincenzo; Raiteri, Emilio; Spagnolo, Giancarlo |
| Abstract: | What is the impact of buyers on the performance of innovation procurement? In which phase of the procurement process are buyers most crucial and why? We address these questions by exploiting a novel dataset that links U.S. federal R&D contracts to their follow-on patents, citations and claims. Using the deaths of managers in the offices close to where contracts are performed as shocks to the functioning of these offices, we measure a positive and sizable effect of public buyers on all three outcome measures. The buyer's role is stronger in the pre-award, tender-design phase, where cooperation between different specialists is essential, than in the following contract-management phase typically performed by individual officers. Consistently, bureaus where employees perceive high level of cooperation within the office are associated with better R&D outcomes. |
| Keywords: | Buyers; Innovation; Management Practices; patents; Procurement; R&D Procurement |
| JEL: | H11 H57 O31 O32 O38 |
| Date: | 2019–06 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:13777&r=all |
| By: | Andersson, Fredrik (Lund University); Jordahl, Henrik (Research Institute of Industrial Economics); Josephson, Jens (Stockholm University) |
| Abstract: | We review the literature on public sector outsourcing to explore if the theoretical predictions from the incomplete contracts literature hold up to recent empirical evidence. Guided by theory, we arrange services according to the type and magnitude of their contractibility problems. The empirical studies point at rather favourable outsourcing outcomes, in terms of costs and quality, for services without severe contracting problems. The picture is more mixed for services with tougher contracting problems, with the weight of the evidence in favour of public provision. This difference between services is largely in line with the property-rights framework and theories of incomplete contracts. |
| Keywords: | publicly provided goods, property rights, privatization |
| JEL: | D23 H11 L33 |
| Date: | 2019–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12401&r=all |
| By: | Galina Besstremyannaya (New Economic School, Moscow); Sergei Golovan (New Economic School, Moscow) |
| Abstract: | The paper analyzes the impact of physicians' altruism and motivation on the outcomes of pay-for-performance schemes in healthcare, where a fixed price contract on quantity is supplemented with a relative performance contract on quality. Our theoretical model forecasts crowding out of most altruistic types. In an empirical application to the Medicare's nationwide natural experiment with a relative performance contract on quality for acute inpatient care since 2013, we observe the proof of this prediction. Namely, the quality dimensions, which are linked to patient's benefit, demonstrate higher deterioration among top-performing hospitals than other incentivized dimensions. |
| Keywords: | incentives contracts, altruism, dynamic panels, healthcare |
| JEL: | C22 C23 D21 D22 I18 |
| Date: | 2019–03 |
| URL: | http://d.repec.org/n?u=RePEc:duh:wpaper:1903&r=all |
| By: | Munoz-Herrera, Manuel (New York University, Abu Dhabi); Reuben, Ernesto (New York University, Abu Dhabi) |
| Abstract: | In this paper, we study the effects of business culture on market efficiency. We exogenously vary the type of business culture between business-is-business cultures, which consist on impersonal relationships where financial matters are paramount, and business-is-family cultures, which comprise of cohesive personal relationships where financial matters and personal attachments are intertwined. We use a laboratory experiment to assess the effect of business cultures in environments with different degrees of contract enforceability and competition. Our main results indicate that business-is-family cultures are more effective when contracts are unverifiable because they help market participants overcome problems of trust. On the other hand, we find that business-is-business cultures are more effective in competitive settings because they facilitate the severance of ties with unproductive partners. |
| Keywords: | trust, contracts, competition, business culture, communication, social ties |
| JEL: | D91 L22 M14 |
| Date: | 2019–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12398&r=all |
| By: | John R. Graham; Hyunseob Kim; Mark T. Leary |
| Abstract: | We examine CEO-board dynamics using a new panel dataset that spans 1920 to 2011. The long sample allows us to perform within-firm and within-CEO tests over a long horizon, many for the first time in the governance literature. Consistent with theories of bargaining or dynamic contracting, we find board independence increases at CEO turnover and falls with CEO tenure, with the decline stronger following superior performance. CEOs are also more likely to be appointed board chair as tenure increases, and we find evidence consistent with a substitution between board independence and chair duality. Other results suggest that these classes of models fail to capture important elements of board dynamics. First, the magnitude of the CEO tenure effect is economically small, much smaller for example than the strong persistence in board structure that we document. Second, when external CEOs are hired, board independence falls and subsequently increases. Third, event studies document a positive market reaction when powerful CEOs die in office, consistent with powerful CEOs becoming entrenched. |
| JEL: | B26 G3 J3 M12 |
| Date: | 2019–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:26004&r=all |