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novembre 2016
- handle: 10670/1.a9f8vq
- halshs: halshs-01509599
- doi: 10.1257/aer.20150275
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info:eu-repo/semantics/altIdentifier/doi/10.1257/aer.20150275
Mots-clés
Dynamic ContractSujets proches
God--RevelationCiter ce document
Malin Arve et al., « Dynamic Procurement under Uncertainty: Optimal Design and Implications for Incomplete Contracts », HALSHS : archive ouverte en Sciences de l’Homme et de la Société, ID : 10.1257/aer.20150275
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Résumé
We characterize the optimal dynamic contract for a long-term basic service when an uncertain add-on is required later on. Introducing firm risk aversion has two impacts. Profits for the basic service can be backloaded to induce cheaper information revelation for this service: an Income Effect which reduces output distortions. The firm must also bear some risk to induce information revelation for the add-on. This Risk Effect reduces the level of the add-on but hardens information revelation for the basic service. The interaction between these effects has important implications for the dynamics of distortions, contract renegotiation, and the value of incomplete contracts.