Outsourcing is becoming increasingly relevant as a means to respond to rapid changes and reduce investments in noncore competencies (Apte et al., 1997). As traditionally conceived, it is solely based on formal contractual mechanisms, set at an inter-firm level and mainly designed to reduce opportunistic behavior presuming an unbalanced relationship between the client and the supplier (Lacity an...

Landowners are commonly not only better informed about their private cost of conservation than conservation agencies, but also frequently in a position to spend resources on improving their knowledge about contract-relevant parameters before signing a contract on offer. We extend and generalize the literature on conservation contracting by endogenizing the information structure in a setting whe...

In many supply chains consumption of indirect materials, sold by a supplier to a customer for use in her production process, can be reduced by efforts exerted by either party. Since traditional supply contracts provide no incentive for the supplier to exert such effort, shared-savings contracts have been proposed as a way to improve incentives in the channel, leading to more efficient effort ch...

There are two common methods for pricing European call options on a stock with known dividends. The market practice is to use the Black-Scholes formula with the stock price reduced by the present value of the dividends. An alternative approach is to increase the strike price with the dividends compounded to expiry at the risk-free rate. These methods correspond to different stock price models a...

This paper extends our previous research on e-contracts by investigating the problem of deriving business process specifications from business contracts. The aim here is to reduce the risk of behaviour leading to contract violations by encouraging the parties to a contract to follow execution paths that satisfy the policies in the contract. Our current contract monitoring prototype provides run...

This paper presents a principal-agent model in which the agent has imprecise beliefs. We model this situation formally by assuming the agent’s preferences are incomplete as in Bewley (1986) [2]. In this setting, incentives must be robust to Knightian uncertainty. We study the implications of robustness for the form of the resulting optimal contracts. We give conditions under which there is a un...

We introduce a model in which agents in a network can trade via bilateral contracts. We find that when continuous transfers are allowed and utilities are quasilinear, the full substitutability of preferences is sufficient to guarantee the existence of stable outcomes for any underlying network structure. Furthermore, the set of stable outcomes is essentially equivalent to the set of competitive...

The use of case studies in the context of Problem-Based Learning (PBL) is described. A rationale for the use of a problem-based approach is given together with some key features that arise. Two case studies are described briefly in terms of their relevance to an interdisciplinary subject area (Environmental Sciences), their content, some operational aspects, and their applicability in the teach...

We present a new approach to contract semantics which expresses myriad monitoring strategies using a small core of foundational communication primitives. This approach allows multiple existing contract monitoring approaches, ranging from Findler and Felleisen’s original model of higher-order contracts to semi-eager, parallel, or asynchronous monitors, to be expressed in a single language built ...

This paper shows how the fear of signaling distrust can endogenously lead to incomplete contractual agreements. According to standard results in contract theory an optimal incentive contract should be conditional on all verifiable information containing statistical information about an agent’s action or type. Most real world contracts, however, condition only on few contingencies and often no e...