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Flexible contracts

Gottardi, Piero and Tallon, Jean Marc and Ghirardato, Paolo (2017) 'Flexible contracts.' Games and Economic Behavior, 103. 145 - 167. ISSN 0899-8256

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Abstract

This paper studies the costs and benefits of delegating decisions to superiorly informed agents, that is of adopting flexible contracts, relative to the use of rigid, non-discretionary contracts. The main focus of the paper lies in the analysis of the costs of delegation, primarily agency costs, versus their benefits, primarily the flexibility of the action choice in two different environments, one with risk and one with ambiguity.

Item Type: Article
Uncontrolled Keywords: D86, D82, D81, Delegation, Flexibility, Agency costs, Multiple priors, Imprecision aversion
Divisions: Faculty of Social Sciences > Economics, Department of
Depositing User: Elements
Date Deposited: 18 Sep 2019 13:02
Last Modified: 18 Sep 2019 13:02
URI: http://repository.essex.ac.uk/id/eprint/25365

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