Three essays in incomplete contracts

General Introduction These three chapters, while fairly independent from each other, study economic situations in incomplete contract settings. They are the product of both the academic freedom my advisors granted me, and in this sense reflect my personal interests, and of their interested feedback. The content of each chapter can be summarized as follows: Chapter 1: Inefficient durable-goods monopolies In this chapter we study the efficiency of an infinite-horizon durable-goods monopoly model with a fmite number of buyers. We find that, while all pure-strategy Markov Perfect Equilibria (MPE) are efficient, there also exist previously unstudied inefficient MPE where high valuation buyers randomize their purchase decision while trying to benefit from low prices which are offered once a critical mass has purchased. Real time delay, an unusual monopoly distortion, is the result of this attrition behavior. We conclude that neither technological constraints nor concern for reputation are necessary to explain inefficiency in monopolized durable-goods markets. Chapter 2: Downstream mergers and producer's capacity choice: why bake a larger pie when getting a smaller slice? In this chapter we study the effect of downstream horizontal mergers on the upstream producer's capacity choice. Contrary to conventional wisdom, we find anon-monotonic relationship: horizontal mergers induce a higher upstream capacity if the cost of capacity is low, and a lower upstream capacity if this cost is high. We explain this result by decomposing the total effect into two competing effects: a change in hold-up and a change in bargaining erosion. Chapter 3: Contract bargaining with multiple agents In this chapter we study a bargaining game between a principal and N agents when the utility of each agent depends on all agents' trades with the principal. We show, using the Potential, that equilibria payoffs coincide with the Shapley value of the underlying coalitional game with an appropriately defined characteristic function, which under common assumptions coincides with the principal's equilibrium profit in the offer game. Since the problem accounts for differences in information and agents' conjectures, the outcome can be either efficient (e.g. public contracting) or inefficient (e.g. passive beliefs).

Balancing knowledge sharing and protection in collaborative innovation - The roles and dynamics of contracts, IPR's and trust

Pro-gradu tutkielman tavoitteena on tutkia, miten yritykset tasapainoilevat tiedon jakamisen ja suojaamisen välillä innovaatioyhteistyöprojekteissa, ja miten sopimukset, immateriaalioikeudet ja luottamus voivat vaikuttaa tähän tasapainoon. Yhteistyössä yritysten täytyy jakaa tarpeellista tietoa kumppanilleen, mutta toisaalta niiden täytyy varoa, etteivät ne menetä ydinosaamiseensa kuuluvaa tietoa ja kilpailuetuaan. Yrityksillä on useita keinoja tietovuodon estämiseen. Tutkielmassa keskitytään patenttien, sopimusten ja liikesalaisuuksien käyttöön tietoa suojaavina mekanismeina. Kyseiset suojamekanismit vaikuttavat luottamukseen kumppaneiden välillä, ja täten myös näiden halukkuuteen jakaa tietoa kumppaneilleen. Jos kumppanit eivät jaa tarpeeksi tietoa toisilleen, voi yhteistyö epäonnistua. Sopimusten, immateriaalioikeuksien ja luottamuksen rooleja ja vuorovaikutusta tutkitaan kahdenvälisissä yhteistyöprojekteissa. Tutkielmassa esitellään neljä case-esimerkkiä, jotka on koottu suomalaisen metsätoimialan yrityksen haastatteluista.

Profitability Analysis of Service Contracts of Devices

The objective of this study has been to make a profitability analysis of service contracts for a company in Finland. The purpose has been to see how profitable the contracts are and if there possibly were some things to change or develop in the contracts. Allocation rules of cost accounting, service costs both profitability and management of services have been considered in the theory part. All the service contracts that have been valid at least three last accounting periods have been included in the study. All direct costs relating to the contracts have been collected and indirect costs have been assigned to the contracts. Profitability of the contracts has been calculated over three years. Results have been analyzed according to the key figures the company is controlling. Some suggestions for developments have been given at the end of the study. The study has shown differences between the contracts. Part of them has turned out to be like the profitability aims of the company and part less profitable. The study has shown that many factors have an effect on the profitability of the service contracts.

Are Public Private Partnerships that Rigid ? And Why ? : Evidence from Toll Road Concession Contracts

Transport concession contracts are commonly said to be standardized and too rigid. They would not allow public authorities to adapt them to evolving context and circumstances. This paper aims at challenging this view and, more particularly, the view that contractual rigidity for transport concessions is exogenous. Using a transaction cost framework, we disentangle between three main determinants of contractual rigidity: traffic uncertainty; connivance between contracting parties; quality of the institutional environment. Using an original database of toll road concession contracts, we observe a great variety of provisions for toll adjustment. We find that these exogenous determinants significantly influence contractual choices.

Regulating Concessions of Toll Motorways, An Empirical Study on Fixed vs. Variable Term Contracts

Recent theoretical developments on concession contracts for long term infrastructure projects under uncertain demand show the benefits of allowing for flexible term contracts rather than fixing a rigid term. This study presents a simulation to compare both alternatives by using real data from the oldest Spanish toll motorway. For this purpose, we analyze how well the flexible term would have performed instead of the fixed length actually established. Our results show a huge reduction of the term of concession that would have dramatically decreased the firm’s benefits and the user’s overpayment due to the internalization of an unexpected traffic increase.

Förteckning öfver framlidne theologiae doctoren, contracts prosten och kyrkoherden Alexander Lauraei böcker

Imprimatur: F. Granbom.

Förteckning å de aflidne contracts-prosten Samuel Bohms sterbhus tillhörige böcker, som komma att försäljas genom auction i Åbo den [14 maij] 1835

Imprimatur: Axel Gabriel Sjöström.

Förteckning öfver framlidne contracts-prosten och ordens-ledamoten, doctor Joachim Adolph Cleves efterlemnade boksamling, som kommer att genom auction försäljas [den 12 april 1837 å Auctions kammaren]

Imprimatur: J. M. af Tengström.

Indenture of Release of All Existing Contracts and Agreements with Woodstock and Lake Erie Railway Co.

Indenture of release stating that all existing contracts and agreements made by the Woodstock and Lake Erie Railway Co. are cancelled. This release was between the executors of Samuel Zimmerman's will and the Woodstock and Lake Erie Railway Co. February 10, 1858.

Prices of John Brown’s contracts for Port Dalhousie and Thorold Railway from Geneva Street to Thorold Station

Prices of John Brown’s contracts for Port Dalhousie and Thorold Railway from Geneva Street to Thorold Station (1 page, handwritten), n.d.

Report by Jacob Misner on setting contracts for deepening and clearing ditches and estimates of quantities and costs of marsh drainage

Report by Jacob Misner on setting contracts for deepening and clearing ditches and estimates of quantities and costs of marsh drainage (3 ½ pages, handwritten). This is marked as a copy, July 14, 1855.