Agency theory : methodology, analysis ; a structured approach to writing contracts / / Alexander Stremitzer

• Record Nr.: UNINA9910297054203321
• Autore: Stremitzer Alexander
• Pubbl/distr/stampa: Bern, : Peter Lang International Academic Publishing Group, 2018; Frankfurt am Main, Germany : , : Peter Lang, , [2005]; Frankfurt am Main, Germany : , : Peter Lang, , [2018]; ©2005
• ISBN: 3-631-75400-0
• Edizione: [1st ed.]
• Descrizione fisica: 1 online resource (various pagings) : illustrations; digital, PDF file(s)
• Collana: Forschungsergebnisse der Wirtschaftsuniversität Wien ; ; Band 3
• Disciplina: 346.0201
• Soggetti: Agency (Law); Contracts - Methodology
• Lingua di pubblicazione: Inglese
• Formato: Materiale a stampa
• Livello bibliografico: Monografia
• Nota di bibliografia: Includes bibliographical references.
• Nota di contenuto: Cover -- I INTRODUCTION -- 1 The Contracting Problem -- 2 Applications -- 3 Models of Contracting -- 4 Obsession with Modeling Single Effects -- 5 Methodological Reflection -- 6 A Note to the Reader -- II EPISTEMIC PROBLEMS AND PHILOSOPHY OF SCIENCE -- 1 Overview -- 2 The Objectives of Science -- 3 What makes Science scientific? -- 4 Absolute Justification -- 4.1 Basic Concepts of Cognition -- 4.2 Strategies to derive scientific statements -- 4.2.1 Introduction -- 4.2.2 Inductivism -- 4.2.3 Pragmatism - Foundation by Method -- 4.2.4 Falsificationism -- 4.2.5 Conclusion -- 5 Beyond Absolute Justification -- 5.1 Against Scepticism -- 5.2 Dogmatism -- 5.3 Common Sense -- 5.4 An Axiomatic Approach -- 6 The First Principle: Its Cognitive Status -- 6.1 Consequences of Relativism -- 6.2 Overcoming Relativism -- 7 Methodological Implications -- III THE METHOD OF ECONOMICS AND CONTRACT THEORY -- 1 Introduction -- 2 Overview -- 3 Instrumentalism vs. Realism -- 3.1 Introduction -- 3.2 Natural vs. Social Sciences -- 4 Methodological Individualism -- 4.1 Introduction -- 4.2 Rational Choice -- 4.2.1 Choice under Certainty -- 4.2.2 Choice under Uncertainty -- 4.3 A Remark on Game Theory -- 4.4 Defending Rational Choice on Normative Grounds -- 4.5 Economics as a Formal ; vs. Real Science -- 4.6 Realism of Assumptions -- 4.7 Defending Homo Oeconomicus -- 4.7.1 Introduction -- 4.7.2 Relevant Situations -- 4.7.3 Scope of Concepts -- 4.7.4 Robustness - Worst Case -- 4.7.5 Instrumentalism in Modeling -- 4.8 Bounded Rationality vs. Unconscious Rationality -- 4.8.1 Introduction -- 4.8.2 The Evolutionary Mechanism -- 4.8.3 Method of Evolutionary Economics -- 4.9 Piecemeal Social Engineering -- 4.10 Objection of Historicism -- 5&lt -- tab/&gt -- Introspection in Economics -- 5.1 Internal dimension and Instability -- 5.2 Blackboxing vs. Qualitative Method.; 5.3 Heuristic or Independent Source? -- 5.4 The Hermeneutical Method and a priorism -- 6 Empirical Methods -- 6.1 Introduction -- 6.2 Reviving Monism -- 6.2.1 Theory of Revealed Preferences -- 6.2.2 Panphysicalism -- 6.3 Interviews -- 6.4 Controlled Experiment -- 6.5 Econometrics - Historical Experiment -- 6.6 Informal evidence -- 6.7 The Problem of Aggregation -- 6.8 Macro modeling: Beyond Methodological Individualism -- 6.9 Verificationism vs. Falsifications: A Normative Evaluation -- 7 Applied Microeconomics -- 7.1 Applied Microeconomics as an Art -- 7.2 Convergence of Applied Microeconomics and BWL -- 8 Model of Optimal Contract Design -- 8.1 Economics of Institutions -- 8.2 Solving for the Optimal Contract -- 8.3 The Rationale for the Micro-foundation -- 8.4 A Structured Approach -- 9 Practical Life and Theory -- IV ANALYTICAL AGENCY MODELS -- 1 Overview -- 2 The Classical Risk-Incentive Trade-Off -- 2.1 The Basic Model -- 2.1.1 Introduction -- 2.1.2 Modeling Assumptions -- 2.1.3 Contractible Effort -- 2.1.4 Uncontractible Effort -- 2.1.5 Discussion -- 2.2 Risk-Incentive Trade-off for Linear Contracts -- 2.2.1 Introduction -- 2.2.2 Modeling Assumptions -- 2.2.3 The Model -- 2.2.4 Discussion -- 2.2.5 Appendix -- 2.3 Risk Sharing -- 2.3.1 Introduction -- 2.3.2 The Model -- 2.3.3 Model Extension: Diversification -- 2.3.4 Discussion -- 2.4 The Optimal Contract -- 2.4.1 Introduction -- 2.4.2 Mechanics of the Optimal Sharing Rule -- 2.4.3 The Case for Linear Contracts -- 2.4.4 Valuable Information -- 2.4.5 Discussion -- 2.5 Limitations and Extensions -- 3 Error in judgement, Bankruptcy -- 3.1 Input Monitoring -- 3.1.1 Introduction -- 3.1.2 Modeling Assumptions -- 3.1.3 Absence of both Error and Bankruptcy Constraint -- 3.1.4 Bankruptcy constraint -- 3.1.5 Extension: The role of Agent Risk Averseness -- 3.1.6 Presence of Error -- 3.1.7 Discussion.; 3.2 Output Monitoring -- 3.2.1 Introduction -- 3.2.2 Shifting Support -- 3.2.3 Moral Hazard with respect to Risk -- 3.2.4 Discussion -- 4 Transaction Cost, Bonding, Distortion -- 4.1 Transaction Cost and Bonding -- 4.2 Distortion -- 4.2.1 Introduction -- 4.2.2 The Model -- 4.2.3 Discussion -- 5 Dynamic Extensions -- 5.1 Introduction -- 5.2 Income smoothing -- 5.2.1 Introduction -- 5.2.2 The Model -- 5.2.3 Discussion -- 5.3 Reputation Effects in Supergames -- 5.3.1 Introduction -- 5.3.2 Observable but Uncontractible Effort -- 5.3.3 Observable but Uncontractible Output -- 5.3.4 Reinterpretation of the Discount rate -- 5.3.5 A Multiparty Extension -- 5.3.6 Discussion -- 5.4 Career Concerns - Learning -- 5.4.1 Introduction -- 5.4.2 The Basic Model -- 5.4.3 Extension: Adding Innovation -- 5.4.4 Disequilibrium - Transient Effects -- 5.4.5 Discussion -- V CONCLUSIONS -- 1.1 Results -- 1.2 Checklist -- 1.3 Outlook.
• Sommario/riassunto: Designing a contract is often more of an economic than a legal problem. A good contract protects parties against opportunistic behavior while providing motivation to cooperate. This is where economics and, especially contract theory, may prove helpful by enhancing our understanding of incentive issues. The purpose of this book is to provide specific tools which will help to write better contracts in real world environments. Concentrating on moral hazard ; literature, this book derives a tentative checklist for drafting contracts. As an economic contribution to a field traditionally considered an art rather than a science, this treatment also gives much attention to methodological issues.