Delegation of Authority as an Optimal (In)complete Contract The present paper aims to contribute to the literature on the foundations of incomplete contracts by providing conditions under which simple delegation of authority is the solution to the complete-contracting problem of the parties. We consider a hold-up framework where both parties profit from an investment that raises the value of an...

Electronic contracting, based on explicit representation of different parties’ commitments, is a promising way to specifying and regulating behaviour in distributed business applications. A key part of contract-based system is a process through which the actual behaviour of individual parties is checked for conformance with contracts set to govern such behaviour. Such checking requires that rel...

An equitable risk allocation between contracting parties plays a vital role in enhancing the performance of the project. This research presents a new quantitative risk allocation approach by integrating fuzzy logic and bargaining game theory. Owing to the imprecise and uncertain nature of players’ payoffs at different risk allocation strategies, fuzzy logic is implemented to determine the value...

the most accurate contracts may also be involved in ambiguity, and interpretation is trying to understand the legal concept. insurance contract are counted as accession contracts in which the insured has no thorough understanding of the terms. because of parties inequality in insurance contracts, they fall into a different category from the interpretation perspective and demand protective inter...

Dual distribution in franchising is addressed from an incomplete contracting perspective. We explicitly model cooperative (dual distribution) franchising as an organizational form, next to wholly-owned, wholly-franchised, and dual distribution franchise systems. Key conclusions of the model are: (1) dual distribution as an efficient governance mechanism does not depend on heterogeneous downstre...

We present a method for tendering and contracting a project consisting of multiple interdependent tasks, that will ensure that the parties are interested in the behavior that is optimal for the whole system. Still the method enables the participants to change the conditions of their contracts during the process. We also show how can this be applied when only partial information is available abo...

Thinking about contingencies, designing covenants and seeing through their implications is costly. Parties to a contract accordingly use heuristics and leave it incomplete. The paper develops a model of bounded rationality and examines its consequences for contractual design. It is argued that cognition is a natural source of adverse selection in contractual relationships, that contracts may be...

A contract is usually defined as a written or oral agreement between two or more parties involving an enforceable commitment to do or refrain from doing something. In agriculture, contracts between farmers and agribusinesses specify certain conditions associated with producing and/or marketing an agricultural product. By combining various market functions, contracting generally reduces particip...

Numerous studies on the distribution of building dangers have been conducted during last few decades. Even though current study gives significant insights into matter, construction industry members are nonetheless concerned about risks contracting. A product was developed to help contracting parties identify, quantify, and assign each risk address this issue. To supplement model worksheets, flo...

Corporate net zero climate commitments and environmental, social, governance (ESG) policies have the potential to bypass barriers international, national, subnational government action on change other environmental issues. This Article presents results of a new empirical study that demonstrates remarkably widespread use supply chain contracting requirements. The finds roughly 80% ten largest fi...