2011 Fiscal Year Final Research Report

Incentive contracts under long-term relationship

Research Project

Project/Area Number	20730131
Research Category	Grant-in-Aid for Young Scientists (B)
Allocation Type	Single-year Grants
Research Field	Economic theory
Research Institution	Nagoya University
Principal Investigator	HANAZONO Makoto 名古屋大学, 大学院・経済学研究科, 准教授 (60362406)
Research Collaborator	WATANABE Yasutora ノースウェスタン大学, ケロッグ経営大学院, 助教授
Project Period (FY)	2008 – 2011
Keywords	長期的関係 / 関係的契約 / インセンティブ / 情報 / 交渉
Research Abstract	Among the points pertaining to incentive contracts under long-term relationship, I find the conditions under which the transaction cost arises due to contracting parties' asymmetric information. The key is the accuracy of information about the profitability of the project to be contracted upon and the time preference in the bargaining for contract agreement. In particular, the transaction cost due to inefficient agreement becomes relatively higher if the accuracy is medium and the time preference is not so high. Also, I show that as the accuracy improves, the agreement approaches to the efficient one and therefore the transaction cost is becoming smaller.

(4 results)