Managing Conflicts in Relational Contracts

• 成果类型: Article
• 署名作者: Li, Jin; Matouschek, Niko
• 署名单位: Northwestern University
• 刊物名称: AMERICAN ECONOMIC REVIEW
• ISSN/ISSBN: 0002-8282
• DOI: 10.1257/aer.103.6.2328
• 发表日期: 2013
• 页码: 2328-2351
• 关键词: repeated moral hazard; security design; continuous-time; starting small; collusion; incentives

摘要

A manager and a worker are in an infinitely repeated relationship in which the manager privately observes her opportunity costs of paying the worker. We show that the optimal relational contract generates periodic conflicts during which effort and expected profits decline gradually but recover instantaneously. To manage a conflict, the manager uses a combination of informal promises and formal commitments that evolves with the duration of the conflict. Finally, we show that liquidity constraints limit the manager's ability to manage conflicts but may also induce the worker to respond to a conflict by providing more effort rather than less.