Centralized and decentralized contracts in a moral hazard environment

Article Abstract:

A large corporation needs to balance the cost it incurs from a centralized monitoring scheme of employee hiring and compensation with the efficiency garnered from franchising. The former is more effective in preventing opportunistic behavior among corporate officers and employees if the corporate units are relatively near the head office. However, if the units are located in different regions, monitoring of conspiracies among employees would be difficult. The latter structure should utilize decentralized employment contracts such as those used by franchised units.

Business Personnel Management, Lessors of Nonfinancial Intangible Assets (except Copyrighted Works), Patent owners and lessors, Franchising, Methods, Human resource management, Ethical aspects, Corporations, Franchises, Supervision of employees, Employee supervision, Corporate corruption, Decentralization (Management), Branches (Business enterprises)

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Negotiation and renegotiation of optimal financial contracts under the threat of predation

Article Abstract:

An analysis is presented on the effect of renegotiation on the ability of financial contracts between a lender and entrant to deter an incumbent's predation. It is found that there is more difficulty involved for the entrant to obtain financing and the contract to deter predation. Stronger bargaining power given to the entrant and lender improves the efficiency of the optimal contract but does not change the results of renegotiation.

Economic aspects, Negotiation, Negotiations, Long-term financing, Long term financing

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Information, Search, and Price Variability of Individual Life Insurance Contracts

Article Abstract:

Price variability in life insurance contracts is examined in a model of buyer choice and life insurance sales incorporating market features. Informed consumer evaluation is assumed. An equilibrium distribution of life insurance prices is obtained.

Life insurance, Insurance policies

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