Incentive Contracts In A Contracting Out Model
Download Incentive Contracts In A Contracting Out Model full books in PDF, epub, and Kindle. Read online free Incentive Contracts In A Contracting Out Model ebook anywhere anytime directly on your device. Fast Download speed and no annoying ads. We cannot guarantee that every ebooks is available!
Author | : Jacob Paroush |
Publisher | : |
Total Pages | : |
Release | : 2008 |
Genre | : |
ISBN | : |
We expand upon Sappington and Stiglitz's quot;first fundamental privatization theorem,quot; which suggests the conditions for an efficient incentive structure, by explicitly introducing contractor deception and contractee monitoring costs. We demonstrate that when contractors can deceive by delivering less than promised, then not only will the bid-winning contractor benefit from earning some rent, but so, too, will the principal. We prove the intuitive result that the contractor's rent--and its loss if the deception is detected--reduces the contractor's incentive to deceive. And although this rent increases the principal's payment to the contractor, the principal reduces its total costs by saving on its monitoring costs. Finally, we also demonstrate the critical role played in the contracting out decision by the contractor's risk preference.
Author | : Jacob Paroush |
Publisher | : |
Total Pages | : 11 |
Release | : 1994 |
Genre | : |
ISBN | : |
Author | : United States. Department of Defense |
Publisher | : |
Total Pages | : 268 |
Release | : 1969 |
Genre | : Defense contracts |
ISBN | : |
Author | : R. Preston Mcafee |
Publisher | : Heritage |
Total Pages | : 182 |
Release | : 1988-12 |
Genre | : Business & Economics |
ISBN | : 9781487581404 |
Could the existing level of government services by provided at a lower cost? This study presents a convincing argument for incentive contracts as a means to this end. In a typical market economy, payments from the government to firms account for about one-half of government spending (excluding transfer payments). By changing the way in which a government pays the firms from which it procures goods and services, it would be possible to maintain the existing array of government programs at a lower price. The major finding of this study is that governments could significantly reduce their expenditures by making extensive use of incentive contracts where they currently use either fixed-price contracts or cost-plus contracts. An incentive contract shares cost overruns and cost underruns between the government and the contractor according to a predetermined ratio. An incentive contract stimulates competition among the firms bidding for the contract and shares the project's risk between the government and the selected firm, while giving the contractor incentives to keep incurred costs low. In addition to advocating the use of incentive contracts, the study analyses the consequences of preferential treatment for domestic content over foreign content in government procurement, discusses the choice for a government agency between producing a commodity or service in-house and contracting for its provision with a private firm, and examines the experience with contracting of both the Ontario government and the United States Department of Defense in order to draw lessons for government contracting in general.
Author | : Joseph L. Midler |
Publisher | : |
Total Pages | : 356 |
Release | : 1970 |
Genre | : Contracting out |
ISBN | : |
Several versions of the negotiation of the parameters of incentive contracts between a government and private contractors are formulated as game theoretical models. This framework permits one focus upon a number of aspects that have previously been overlooked such as the interaction of the participants, the lack of domination by one side or the other, constraints upon the player's strategies, and the possible joint interests of the one party in the other player's outcome. Computational methods of solution are suggested. (Author).
Author | : Gregory Sanders |
Publisher | : Rowman & Littlefield |
Total Pages | : 74 |
Release | : 2018-04-19 |
Genre | : Political Science |
ISBN | : 1442280662 |
Traditional contracting is primarily transactional, rewarding contractors when deliveries are made or certain process milestones are met. Performance-Based Logistic (PBL) contracting seeks to base contractor incentives on ongoing performance measures to achieve reliability and cost savings. Key to the success of these arrangements are the incentives that align the interests of the customer and the vendor. This report describes the incentives used in PBL contracts, identifies best practices, and provides recommendations for effective incentives going forward. The study team interviewed PBL practitioners including defense-unique contractors, defense-commercial contractors, and experts who are knowledgeable in the government perspective in the United States and abroad. The team supplemented these interviews by analyzing a PBL dataset of U.S. Department of Defense contracts. Of the four identified categories of incentives—time-based, financial, scope, and other—interviews found that time-based incentives stood out for their reliable appeal and relative underuse in the United States.
Author | : Edward B. Roberts |
Publisher | : Forgotten Books |
Total Pages | : 48 |
Release | : 2018-02-23 |
Genre | : Reference |
ISBN | : 9780666180346 |
Excerpt from Effects of Incentive Contracts in Research and Development: A Preliminary Research Report In the past several years an effort has originated in the Defense Department (and followed by other government agencies) to discourage the use of cost-p1us=fixed fee (cpff) contracts and substitute contractual incentive arrangements. This effort supposedly relies upon the profit motive to reduce requirements for direct government control and to stim ulate better contractor performance and cost estimating. Incentive type contracts are not new in government contracting. Production contracts have been awarded on a fixed price basis for many years. The fixed price contract provides maximum correlation of contract profits with contract cost, and in theory might offer maximum cost incentive. How ever the use of incentive arrangements on r&d contracts is the novel feature of the dod (and nasa) programs of the past several years. About the Publisher Forgotten Books publishes hundreds of thousands of rare and classic books. Find more at www.forgottenbooks.com This book is a reproduction of an important historical work. Forgotten Books uses state-of-the-art technology to digitally reconstruct the work, preserving the original format whilst repairing imperfections present in the aged copy. In rare cases, an imperfection in the original, such as a blemish or missing page, may be replicated in our edition. We do, however, repair the vast majority of imperfections successfully; any imperfections that remain are intentionally left to preserve the state of such historical works.
Author | : Ola Kvaløy |
Publisher | : |
Total Pages | : 0 |
Release | : 2016 |
Genre | : |
ISBN | : |
We analyse optimal incentive contracts in a model where the probability of court enforcement is determined by the costs spent on contracting. The analysis shows that there is no monotonic relationship between contracting costs and incentive intensity, and that an increase in contracting costs may lead to higher-powered incentives. Moreover, we formulate hypotheses about the relationship between legal systems and incentive provision. Specifically, the model predicts higher-powered incentives in common law than in civil law systems. We also find that better performance measures may induce lower investments in contracting, and potentially lead to lower-powered incentives.
Author | : Eva I. Hoppe-Fischer |
Publisher | : Springer |
Total Pages | : 211 |
Release | : 2019-02-19 |
Genre | : Business & Economics |
ISBN | : 3658241330 |
Contract theory, which emphasizes the importance of unverifiable actions and private information, has been a highly active field of research in microeconomics in the last decades. This thesis is divided into two parts. Part I consists of three chapters that study contract-theoretic models which are motivated by the classic procurement problem of a principal who wants an agent to deliver a certain good or service. In such models it is typically assumed that decision makers are interested in their own monetary payoffs only. Moreover, they have unlimited cognitive abilities and behave in a perfectly rational way. Yet, in practice people often do not behave this way. While empirical research is very difficult in contract theory, laboratory experiments have recently turned out to be an important source of data. In Part II, three experimental studies are presented that investigate contract-theoretic problems brought up in Part I.
Author | : Ola Kvaløy |
Publisher | : |
Total Pages | : |
Release | : 2010 |
Genre | : |
ISBN | : |