A note on optimal procurement contracts with limited direct cost inflation

• 成果类型: Article
• 署名作者: Chu, Leon Yang; Sappington, David E. M.
• 署名单位: State University System of Florida; University of Florida; University of Southern California
• 刊物名称: JOURNAL OF ECONOMIC THEORY
• ISSN/ISSBN: 0022-0531
• DOI: 10.1016/j.jet.2007.01.005
• 发表日期: 2007
• 页码: 745-753
• 关键词: procurement contracts; cost inflation; asymmetric information

摘要

Laffont and Tirole's [Using cost observation to regulate firms, J. Polit. Econ. 94 (1986) 614-641] pioneering analysis identifies the optimal procurement contract when the supplier can readily inflate his innate production cost without detection. When the buyer has some ability to limit such cost inflation, an alternative contract can outperform the contract identified by Laffont and Tirole. The alternative contract induces substantial pooling, discontinuous production costs and effort supply, and rent that varies non-monotonically with innate cost. (c) 2007 Elsevier Inc. All rights reserved.