Two agents sequentially contracts with different principals under moral hazard. If agents care for one another, the second principal gains by insuring them over first wages. Even with independent tasks, the first principal must offer riskier payments to induce effort. JEL Codes: D10, D64, D82.

Aggregate productivity falls in recessions and rises in expansions. Several empirical studies suggest that the systematic behavior of lending standards, with laxer (tighter) standards applied during expansions (recessions), is responsible for reverting trends in aggregate productivity. We build a dynamic model that rationalizes these findings. Higher liquidity brought about by high levels of ca...

Pay-for-performance (P4P) initiatives have been discussed since the early 1990s, but support for the concept has grown recently, fueled by experience with quality of care measures, endorsements by key players and research that underlines the need for quality improvements and reform to the physician payment system. This synthesis examines the evidence on P4P. Key findings include: About one-thir...

We present three smart contracts that allow a briber to fairly exchange bribes to miners who pursue a mining strategy benefiting the briber. The first contract, CensorshipCon, highlights that Ethereum’s uncle block reward policy can directly subsidise the cost of bribing miners. The second contract, HistoryRevisionCon, rewards miners via an in-band payment for reversing transactions or enforcin...

W study a channel relationship in which manufacturer(s) use independent sales representatives (rep firms), which employ salespeople to do the actual selling. We show that commission-only payments by manufacturers to rep firms lead to suboptimal outcomes for the manufacturer relative to those obtained under a vertically integrated channel. From the manufacturer’s standpoint, these inefficiencies...

Issues By Sandy Dunn, Director, Assetivity Please request permission from the author before copying or distributing this article There are a number of issues facing organisations that are considering maintenance outsourcing as an improvement initiative. Amongst these are the following: To outsource or not outsource strategic decision making Does a competitive outsourcing market exist? How much ...

Although significant research work has been conducted on cash flow forecast, planning, and management, the objective is constantly the maximization of profit/final cash balance, or minimization of total project cost. This paper presents a multi-objective fuzzy linear programming model (FLP) for resolving the optimization problem of three conflicting objectives: final cash balance, cost of money...

We study the moral hazard problem with general constraints on how little or much the agent can be paid as a function of output. We provide a characterization and existence result using only very simple methods. In the dual problem of minimizing costs for a given effort level, a constraint that harms the principal will always result in a contract that pays according to the constraint on some ran...

introduction payment system is any organized arrangement for transferring monetary value leading to discharge and settlement of obligation. negotiable instruments in their special meaning are tradable documents that can be used as means of payment in commercial and consuming trades and are considered as non-cash payment system among the monetary transferring systems. the negotiable instruments ...