Arguments for Benefit of the Owner's Priority in Company Management

The author proves priority in company management from the owner (the participant, the shareholder). The participant has managerial powers, including concerning the choice of economic strategy of business, owing to the economic and legal nature. The right of the owner makes changes to the charter confirms its priority in company management. In competence of the owner there is development of long-term incentive system of governing body (management and board of Directors). The owner can use model of «the expected damage» (interpretation of the agreement), for decrease in the risk connected with actions of management in private interests (self-dealing) in the conditions of the incomplete contract.

A theoretical foundation for games of complete/incomplete contracts

This paper provides a theoretical foundation for complete/incomplete contracts to extend game theory for multi-agent interactions. We explain why rational agents may agree to sign incomplete contracts even though signing a complete contract incurs no cost. Some arguments claim that an incomplete contract creates strategic uncertainty. Under common assumptions of rationality, an incomplete contract can be the final solution if the agents’ attitudes toward uncertainty are not neutral. Assuming that agents can form coalitions by participating in the game and they are uncertainty averse, we develop equilibrium solutions for complete/incomplete contracts in an extensive game of multi-agent interactions.

Research on Supply Chain Governance Strategy: game value analysis based on Incomplete Contract Theory

There are potential opportunistic risks in the partnerships of enterprises in different industries. Asymmetric information, incomplete decision-making and Human bounded rationality are factors for the formation of opportunistic risks, and adopting external governance is a feasible way to defuse the risks. Supply chain governance is a new type of governance which is different from enterprise governance. Its scope of governance is wider than enterprise governance. It is the performance of environmental evolution and organizational innovation. Based on the incomplete contract, this paper analyzes the game between the supplier and the manufacturer. It is found that in the process of the game, the cooperation benefits of both parties are the largest and the distribution of benefits is the fairest. Therefore, combined with the theory of supply chain governance, this paper hopes to maximize the value of supply chain by optimizing the supply chain governance strategy under the condition of incomplete contract.

Gender Violence and the Price of Virginity: Theory and Evidence of Incomplete Marriage Contracts

This paper builds and tests a model of marriage as an incomplete contract that arises from asymmetric virginity premiums and examines whether this can lead to social inefficiencies. Contrary to the efficient households hypothesis, women cannot prevent being appropriated by men once they enter marriage if they command lower marriage market opportunities upon divorce. Because men cannot or do not commit to compensating women for their lower ex post marriage market opportunities, marriage is an incomplete contract. Men may seek to lower women’s ex ante “market wages” in order to induce entry into joint production. Inefficient or abusive marriages are less likely to separate. Equalizing virginity premiums may reduce domestic and non-domestic violence. Female circumcision and prices women pay doctors to appear virgin before marriage in many countries suggest asymmetric virginity premiums continue to exist. Evidence from China and the US suggest asymmetric virginity premiums persist over economic development. Asymmetric virginity premiums are strongly positively correlated with female but not male virginity premiums. I use variation in religious upbringing to help estimate the effect of virginity premiums on gender violence in the US. The OLS relationship between virginity premiums and female reports of forced sex may be biased downwards if shame is associated with abuse and this shame is greater for women with higher virginity premiums. But the OLS relationship for males might not be biased downwards. Asymmetric virginity premiums are positively correlated with men forcing sex on women and paying women for sex. The model complements a growing empirical literature on inefficient households and human rights abuses, visible manifestations of female appropriability across time and space.

Tropical medicine: The economics and the evolving practice of antitrust remedies in Brazil

Antitrust remedies are a central part of the competition policy toolbox. Their actual use and design depends on interrelated factors such as the Antitrust Authority’s analytical capabilities, institutional design and bargaining power. Economics can contribute to the design of remedies, using a transaction cost, principal-agent incomplete contract framework, as remedies are generally drawn as an agreement between the Authority and parties under extensive information asymmetries. This provides a rationale for the principles and policies’ choices of the Brazilian Antitrust Authority, CADE, on remedies over the past decade. There has been a shift towards agreements instead of unilaterally imposed remedies, extensive use of trustees and communication by an Antitrust Remedies Guide to signal CADE’s policies.

Why Does Headquarters Voluntarily Transfer its Bargaining Power to Business Units?

The objective of our paper is to provide the reason why the headquarters voluntarily transfer its bargaining power to the business unit by stylizing an incomplete contract model. Our model shows that the equilibrium bargaining power selected by the headquarters is negatively correlated with the importance attached to the business unit’s operations. It means when incomplete contracts severely restrict an important business unit’s incentive to invest because of holdup problem, then the headquarters should necessarily provide the business unit with some degree of bargaining power. This result is consistent with the fact that the independence of a business unit (e.g., spin-offs) is a commonly observable practice. Building on our model, independence of the business unit can be interpreted as a consequence of a gradual delegation of authority by the headquarters. Our paper contributes to both of economics and management accounting literature through providing a model concerning to a decision of organizational structure. Keywords: bargaining power; cost structure; independence of business unit