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We present three distinct works on the subject of incentive design. The first focuses on a fundamental aspect of all principal-agent models, the participation constraint. We endogenise the constraint, allowing the agent to influence his outside option, albeit at some detriment to the project he is contracted to work upon. We compare the optimal contract to the literature on the supposed trade-off between risk and incentives. We find support for the Prendergast (2002) observation of a positive relationship between the two variables and ofer an explanation through the use of said influence activities. The second contribution introduces another principal-agent framework for models with both adverse selection and moral hazard, with the novel inclusion of limited liability. Described in a target-setting environment, the findings are related to and support the use of tenure contracts in academia. This is justified by the fact that pooling equilibria maximise the value to the principal and fully separating equilibria are implemented with non-monotonic wage structures. Finally, in opposition to conventional literature, those of low type make rent gains over and above their reservation utility, while the high types break even. The final chapter studies organisational design and allocation of control. We offer conditions whereby firms would wish to integrate, or profit-share, with another, given varying degrees of control allocation. We show that integration comes at a lower cost for the decision-making firm when control is contractible as opposed to transferable. Also we show that the level of incompatibility between firms, unrelated to financial gain, can affect the integration decision.

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The study follows the "contract theory" to establish a model of a classification system for certification under the Lease of agricultural products for the design contract. In addition to show the optimal lease¡¦s prices and classification standards for certification of the determining factors, an important phenomenon, this model can be used to interpret, Lease contract with a decline in transaction costs discount and gradually disappear from the market.

Contracts capture an agreement between two parties to exchange a resource in the future (ex-ante), however the future is not certain. Only after the event has happened, might the two parties compare the resources they have received to what they expected (ex-post). Entering into a contract with unknowns gives rise to incomplete contracts theory, the focus of which includes the study of human behavior. Relational contracting is currently being studied as a method of reducing the transaction costs and incompleteness of contracts. Using case studies, this research aimed to reach a conclusion regarding why certain contractual projects run over budget. Overruns are often related to a variation agreement that is incomplete and open to interpretation. Understanding what the issues are and how to mitigate contractual risks was thus a key focus of this research. The research examined two industries - construction and IT. From the case studies, 16 interviews were conducted and 12 contracts reviewed. The least concern for all the parties was disputes, as the parties find solutions to address issues not considered when drafting contracts. Industry specific experience and knowledge is needed to mitigate some unknown contractual risks, however. Relational contracting was also very evident in resolving issues outside of a contract. Further studies into ancillary contracts will reveal more insight into behavioural and relational contracting. / Dissertation(MBA)--Gordon Institute of Business Science, University of Pretoria,2018. / Gordon Institute of Business Science (GIBS) / MBA / Unrestricted

This PhD thesis takes a ’micro’ perspective on the production of higher education and research. More precisely, I use tools of industrial organization to study two individual institutions involved in their production process. The second chapter studies universities, the main producers of higher education and research, and the third and fourth chapters analyze scientific journals, which are central in the production and the dissemination of science. Besides being crucial nodes in the production and transmission of knowledge, these institutions, interestingly, share other common characteristics: they both emerged before the Industrial Revolution, their importance increased over the centuries and they seem unavoidable today, and many actors are private not-for-profit.

Despite the broad discourse on fragile states and the threat they pose to the contemporary world order, the literature on the subject does to a large extent ignore the material factors behind the causes of state fragility. Scholars and organizations in the field have almost exclusively adopted the Social Contract Theory (SCT) in order to explain state fragility as a problem caused by social factors. This study broadens the discourse by applying SCT as well as the Actor-Network Theory (ANT) on the case study of Sudan, in order to do a deductive theory testing of the added value of each theory. The results of this study show that while the Social Contract Theory does explain many factors behind state fragility, the application of the Actor-Network Theory adds to this by also incorporating the networks between the social and material determinants in societies. This research contributes to the debate on fragile states by adding to the scarce research on the materiality of fragility through the use of the Actor-Network Theory. The positive results of this thesis encourage future use of this theory in the field as it has the potential to give new insights in how to deal with fragile states.

of the Master thesis This Master thesis deals with an institute of the Czech contract law - kauza (causa). The example of kauza (and consideration) illustrate the tendency of legal systems to keep institutes once they have been created, even at the cost of inconsistent changes in their definition, purpose or function. The original meaning of the institutes is continuously blurred which makes it difficult to assess whether their use in the current legal system is substantiated. The main purpose of the thesis is to contribute to a clarification of the real function of kauza in the Czech contract law. Unlike in foreign legal publications, kauza is rather marginalized in Czech legal writings. Authors that deal with the problems of kauza (at least to some extend) often come to mutually exclusive/ inconsistent conclusions. The classical doctrine of causa makes little sense in the consensual concept of contract that seems to be favored in the Czech legal theory. Namely, the requirement of kauza appears to be additional to a requirement of consensus of the parties. Such theoretical discrepancy may be one of the reasons why the meaning of kauza in the Czech law is still unclear. Contract theories facilitate a deeper understanding of contracts, contract law and its particular institutes. However, the Czech...

Firms outsource productive tasks to different locations in order to exploit factor price differentials and gain efficiencies from specialization. However, the benefits of outsourcing come with two risks. The first problem occurs when firms share their pre-existing intellectual property (IP) such as database and trade secrets with contractors. While IP is shared to facilitate the outsourcing project, the contractor may behave opportunistically and misappropriate the IP for its own benefit. Since firms derive significant value from their IP, this can lead to severe economic damages in terms of reduced market share and brand value. The second agency problem arises due to non-contractible effort exerted by the contractor. Depending on the outsourced task, shirking can lead to higher costs and poor quality product. In this dissertation, contractual solutions are developed to mitigate these agency problems associated with outsourcing. First, several IP misappropriation cases are enumerated in the context of outsourcing. The existing literature is reviewed and the limitations are addressed in the light of these actual cases. Second, theoretical models are developed by considering two forms of IP misappropriation, depending on whether a R&D contractor emerges as a direct competitor of the principal firm, or the contractor sells the principal?s IP to a competitor. Contracts are developed to implement a ?carrot and stick? strategy, whereby firms share limited IP with their contractor and also provide incentive payments to deter shirking problem. It is shown that complementary strategies like product differentiation, task modularization, and investment in technological solutions can be useful when legal enforcement is weak. It is also demonstrated that even under the possibility of IP misappropriation; firms may gain from outsourcing if in-house inefficiency is high. However, if legal enforcement is weak, outsourcing would entail higher transaction costs. Finally, an event study is conducted to examine the effect of trade secret misappropriation on the value of Lexar. While Lexar is still outsourcing, it is explored how Lexar survived the IP misappropriation problem through product differentiation and marketing strategies.

This dissertation studies three economic problems plagued by multiple equilibria. Indeterminacy of equilibrium outcome often poses a challenge in deriving robust predictions and policy guidance. The dissertation shows how the utilization of potential game theory can better deal with this challenge. Chapter 1 studies a general contracting problem between one principal and multiple agents. The interdependence of agents’ actions and payoffs creates a coordination problem among them, leading to multiple equilibria. In general, the principal’s optimal contracting scheme varies with how one selects among equilibria. Nevertheless, for a large class of contracting models where agents’ payoffs constitute a weighted potential game, I show that one contracting scheme is optimal for a large class of equilibrium selection criteria. This scheme ranks agents in increasing weight in the weighted potential game and induces them to accept their offers in a dominance-solvable way, starting from the first agent. I also apply the general results to networks and pure/impure public goods/bads. Chapter 2 studies two-sided markets, where two groups of agents interact via platforms. These markets exhibit network effects, i.e., the value of joining a platform increases with the number of users, which in turn lead to multiple equilibria. I show that many two-sided market models are weighted potential games, enabling the selection among equilibria by potential maximization—a refinement of Nash equilibrium justified by many theoretical and experimental studies. Under potential maximization, platforms often charge the side deriving more network benefits and subsidize the other side. Therefore, profit-maximizing platforms are often designed to favor the money side much more than the subsidy side. Chapter 3 studies markets with strong network effects. In these markets, firms compete for the adoption of all consumers rather than the marginal consumer. Therefore, the Spence distortion—a quality distortion driven by competition for the marginal consumer—should be absent, contradicting the findings in the network economics literature. This inconsistency stems from the choice of equilibrium selection criterion. I show that all popular selection criteria in that literature lead to Spence distortions, whereas potential maximization does not. Therefore, network market regulations based on Spence distortion arguments may be misguided.