A Principal-Agent Relationship with No Advantage to Commitment

2021 ◽  
Author(s):  
Rajiv Vohra ◽  
Francisco Espinosa ◽  
Debraj Ray
Keyword(s):  
Principal Agent ◽  
Principal Agent Relationship

scholarly journals Endogenous Verifiability and Relational Contracting

2009 ◽  
Vol 99 (5) ◽  
pp. 2193-2208 ◽  
Author(s):  
Ola Kvaløy ◽  
Trond E. Olsen
Keyword(s):  
Principal Agent ◽  
Relational Contracting ◽  
Strong Assumption ◽  
Repeated Interaction ◽  
Ex Ante ◽  
Contractual Incompleteness ◽  
The Relationship ◽  
Principal Agent Relationship

Principal-agent models usually invoke the strong assumption that the parties know for sure ex ante whether a variable is verifiable or not. This paper assumes that only the probability of verification is known, and that this probability is endogenously determined. We analyze a principal-agent relationship where the verifiability of the agent's output is determined by the principal's investment in drafting an explicit contract. The model is well suited for analyzing the relationship between explicit contracting, legal courts, trust, and relational contracting. In particular, we show how trust—established through repeated interaction—and legal courts may induce contractual incompleteness. (JEL D82, D86)

Norwegian Approach to Private Internal Investigations: An Empirical Study of Mandates for Fraud Examiners

2017 ◽  
Vol 29 (1) ◽  
pp. 48-58
Author(s):  
Petter Gottschalk
Keyword(s):  
Empirical Study ◽  
Law Firms ◽  
Principal Agent ◽  
Financial Crime ◽  
Opportunistic Behavior ◽  
The Public ◽  
The Past ◽  
Private And Public ◽  
Opening Up ◽  
Principal Agent Relationship

This article applies principal–agent relationship theory through an empirical study of private investigators’ mandates for fraud examiners in Norway. The business of private internal investigations by external fraud examiners has grown remarkably in the recent decades. Law firms and auditing firms are hired by private and public organizations to reconstruct the past when there is suspicion of misconduct and potential financial crime. Most reports of investigation are kept secret to the public and often also to the police, even when there is evidence of financial crime by white-collar criminals. For this study, we were able to identify and retrieve a total of 49 investigation reports in Norway for the 10-year period from 2006 to 2016. Reports are studied in terms of mandates defining the motive, purpose, scope, tasks, and goals. We find that mandates are deficient, thereby opening up for opportunistic behavior by both parties in the principal–agent relationship.

9 Legal Relations Between Principal and Agent: Rights of the Agent against the Principal

2016 ◽  
Author(s):  
Munday Roderick
Keyword(s):  
Principal Agent ◽  
The Right ◽  
Principal Agent Relationship

This chapter examines the three principal rights enjoyed by the agent specific to the principal–agent relationship. The first is the agent’s entitlement to remuneration: if it is a term of the contract, the agent will be entitled to remuneration in accordance with what the parties have expressly or impliedly agreed in their contract. Alternatively, the agent may be entitled to recover from the principal on the basis of a quantum meruit. Next is the right to indemnity: regardless of whether or not there is a contract, an agent is entitled to be indemnified for expenses incurred and losses occasioned in the performance of the agency. Finally, the chapter looks at how the agent may enjoy a possessory lien over the principal’s property.

scholarly journals Intellectual Property Management in Publicly Funded R&D Program and Projects: Optimizing Principal–Agent Relationship through Transdisciplinary Approach

2020 ◽  
Vol 12 (23) ◽  
pp. 9923
Author(s):  
Shuto Miyashita ◽  
Shogo Katoh ◽  
Tomohiro Anzai ◽  
Shintaro Sengoku
Keyword(s):  
Intellectual Property ◽  
Network Analysis ◽  
Research And Development ◽  
The Body ◽  
Principal Agent ◽  
Property Management ◽  
Publicly Funded ◽  
Intellectual Property Management ◽  
The Creation ◽  
Principal Agent Relationship

Large-scale, publicly funded research and development (R&D) programs are implemented to accelerate state-of-the-art science, technology, and innovation applications that are expected to solve various societal problems. The present study aims to build on the body of theory on the mechanisms that promote or impede the creation of intellectual property in such programs. Using a mixed methods approach and combining quantitative network analysis and qualitative semistructured interviews, we conducted a case study to investigate best practices in terms of intellectual property creation in a Japanese governmental research and development program. The results of the network analysis showed that the core/periphery structure in the co-inventor network of patents and joint application by a university and a startup promoted intellectual property creation. The results of the interview confirmed the significance of a reciprocal mindset, which the researchers in academia could acquire through collaboration with a startup. These results suggest that a knowledge logistics system for agile intellectual property management can be established by learning to acquire tacit knowledge on social implementation. Furthermore, we focus on the principal–agent relationship between knowledge producers and knowledge consumers as a factor that impedes the creation of intellectual property. We also discuss adverse selection and moral hazards caused by information asymmetry between knowledge producers and knowledge consumers and how to deal with them.

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