Flexible contracting with heterogeneous agents and stochastic demand

نویسندگان

چکیده

While the predominant pricing scheme for services is a set of long-term contracts stipulating fixed fee level usage, many service providers now offer flexible contracts. These include flexibility in usage and option to opt out certain time periods. We study effectiveness aligning interests between provider customers presence with different discrete demand distributions. This work develops unified principal–agent framework examine multiple versions under ex post information asymmetry. explore two types contract variations. The first aggregated versus differentiated across an agent’s random values, second whether agent may decline participation future period after committing options. find that principal always prefers differentiation aggregation, require at each period. However, when variability grouped together contracts, we derive sufficient condition it more profitable allow agents participating Furthermore, agents’ preference overall social utility depends on value functions Our provides insights help decision makers price their better satisfy customers’ varying needs while improving profitability service.

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ژورنال

عنوان ژورنال: International Journal of Production Economics

سال: 2021

ISSN: ['0925-5273', '1873-7579']

DOI: https://doi.org/10.1016/j.ijpe.2020.107840