Department: Economia
URV's Author/s: Esteve-González, Patricia
Keywords: Incentius Risc moral Incentivos Riesgo moral Moral hazard Incentives
Abstract: This paper analyzes repeated procurement of services as a two period model with a potential repeated agency relationship. In the first period, there is an incumbent who provides a service. In the second period, there is a contest stage in which the principal selects the next service provider. The agents¿ effort is non-contractible and the contest stage is the mechanism to mitigate potential moral hazard problems. The principal takes account of the past service effort in the contest stage by choosing the weight of past effort and the degree of substitutability between past and current efforts. The results show that, when the principal does not value contest effort, considering past effort as the relevant effort in the contest is optimal. When the principal values contest effort and effort cost increases, decreasing substitutability between efforts is optimal.
Research group: CREIP
Thematic Areas: Economia i empresa Economía y empresa Economics and business
ISSN: 0167-7187
Author identifier: 0000-0003-3740-1396
Record's date: 2016-10-05
Last page: 269
Journal volume: 48
Papper version: info:eu-repo/semantics/submittedVersion
Licence document URL: https://repositori.urv.cat/ca/proteccio-de-dades/
Entity: Universitat Rovira i Virgili
Journal publication year: 2016
First page: 244
Publication Type: Article Artículo Article
Repositori URV