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Agency Theory : A Structured Approach to Writing Contracts.

Bibliographic Details
Main Author: Stremitzer, Alexander.
Format: eBook
Language:English
Published: Frankfurt a.M. : Peter Lang GmbH, Internationaler Verlag der Wissenschaften, 2004.
Edition:1st ed.
Series:Forschungsergebnisse der Wirtschaftsuniversitaet Wien Series
Subjects:
Electronic books.
Online Access:Click to View
Table of Contents:
  • Cover
  • I INTRODUCTION
  • 1 The Contracting Problem
  • 2 Applications
  • 3 Models of Contracting
  • 4 Obsession with Modeling Single Effects
  • 5 Methodological Reflection
  • 6 A Note to the Reader
  • II EPISTEMIC PROBLEMS AND PHILOSOPHY OF SCIENCE
  • 1 Overview
  • 2 The Objectives of Science
  • 3 What makes Science scientific?
  • 4 Absolute Justification
  • 4.1 Basic Concepts of Cognition
  • 4.2 Strategies to derive scientific statements
  • 4.2.1 Introduction
  • 4.2.2 Inductivism
  • 4.2.3 Pragmatism - Foundation by Method
  • 4.2.4 Falsificationism
  • 4.2.5 Conclusion
  • 5 Beyond Absolute Justification
  • 5.1 Against Scepticism
  • 5.2 Dogmatism
  • 5.3 Common Sense
  • 5.4 An Axiomatic Approach
  • 6 The First Principle: Its Cognitive Status
  • 6.1 Consequences of Relativism
  • 6.2 Overcoming Relativism
  • 7 Methodological Implications
  • III THE METHOD OF ECONOMICS AND CONTRACT THEORY
  • 1 Introduction
  • 2 Overview
  • 3 Instrumentalism vs. Realism
  • 3.1 Introduction
  • 3.2 Natural vs. Social Sciences
  • 4 Methodological Individualism
  • 4.1 Introduction
  • 4.2 Rational Choice
  • 4.2.1 Choice under Certainty
  • 4.2.2 Choice under Uncertainty
  • 4.3 A Remark on Game Theory
  • 4.4 Defending Rational Choice on Normative Grounds
  • 4.5 Economics as a Formal vs. Real Science
  • 4.6 Realism of Assumptions
  • 4.7 Defending Homo Oeconomicus
  • 4.7.1 Introduction
  • 4.7.2 Relevant Situations
  • 4.7.3 Scope of Concepts
  • 4.7.4 Robustness - Worst Case
  • 4.7.5 Instrumentalism in Modeling
  • 4.8 Bounded Rationality vs. Unconscious Rationality
  • 4.8.1 Introduction
  • 4.8.2 The Evolutionary Mechanism
  • 4.8.3 Method of Evolutionary Economics
  • 4.9 Piecemeal Social Engineering
  • 4.10 Objection of Historicism
  • 5&lt
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  • Introspection in Economics
  • 5.1 Internal dimension and Instability
  • 5.2 Blackboxing vs. Qualitative Method.
  • 5.3 Heuristic or Independent Source?
  • 5.4 The Hermeneutical Method and a priorism
  • 6 Empirical Methods
  • 6.1 Introduction
  • 6.2 Reviving Monism
  • 6.2.1 Theory of Revealed Preferences
  • 6.2.2 Panphysicalism
  • 6.3 Interviews
  • 6.4 Controlled Experiment
  • 6.5 Econometrics - Historical Experiment
  • 6.6 Informal evidence
  • 6.7 The Problem of Aggregation
  • 6.8 Macro modeling: Beyond Methodological Individualism
  • 6.9 Verificationism vs. Falsifications: A Normative Evaluation
  • 7 Applied Microeconomics
  • 7.1 Applied Microeconomics as an Art
  • 7.2 Convergence of Applied Microeconomics and BWL
  • 8 Model of Optimal Contract Design
  • 8.1 Economics of Institutions
  • 8.2 Solving for the Optimal Contract
  • 8.3 The Rationale for the Micro-foundation
  • 8.4 A Structured Approach
  • 9 Practical Life and Theory
  • IV ANALYTICAL AGENCY MODELS
  • 1 Overview
  • 2 The Classical Risk-Incentive Trade-Off
  • 2.1 The Basic Model
  • 2.1.1 Introduction
  • 2.1.2 Modeling Assumptions
  • 2.1.3 Contractible Effort
  • 2.1.4 Uncontractible Effort
  • 2.1.5 Discussion
  • 2.2 Risk-Incentive Trade-off for Linear Contracts
  • 2.2.1 Introduction
  • 2.2.2 Modeling Assumptions
  • 2.2.3 The Model
  • 2.2.4 Discussion
  • 2.2.5 Appendix
  • 2.3 Risk Sharing
  • 2.3.1 Introduction
  • 2.3.2 The Model
  • 2.3.3 Model Extension: Diversification
  • 2.3.4 Discussion
  • 2.4 The Optimal Contract
  • 2.4.1 Introduction
  • 2.4.2 Mechanics of the Optimal Sharing Rule
  • 2.4.3 The Case for Linear Contracts
  • 2.4.4 Valuable Information
  • 2.4.5 Discussion
  • 2.5 Limitations and Extensions
  • 3 Error in judgement, Bankruptcy
  • 3.1 Input Monitoring
  • 3.1.1 Introduction
  • 3.1.2 Modeling Assumptions
  • 3.1.3 Absence of both Error and Bankruptcy Constraint
  • 3.1.4 Bankruptcy constraint
  • 3.1.5 Extension: The role of Agent Risk Averseness
  • 3.1.6 Presence of Error
  • 3.1.7 Discussion.
  • 3.2 Output Monitoring
  • 3.2.1 Introduction
  • 3.2.2 Shifting Support
  • 3.2.3 Moral Hazard with respect to Risk
  • 3.2.4 Discussion
  • 4 Transaction Cost, Bonding, Distortion
  • 4.1 Transaction Cost and Bonding
  • 4.2 Distortion
  • 4.2.1 Introduction
  • 4.2.2 The Model
  • 4.2.3 Discussion
  • 5 Dynamic Extensions
  • 5.1 Introduction
  • 5.2 Income smoothing
  • 5.2.1 Introduction
  • 5.2.2 The Model
  • 5.2.3 Discussion
  • 5.3 Reputation Effects in Supergames
  • 5.3.1 Introduction
  • 5.3.2 Observable but Uncontractible Effort
  • 5.3.3 Observable but Uncontractible Output
  • 5.3.4 Reinterpretation of the Discount rate
  • 5.3.5 A Multiparty Extension
  • 5.3.6 Discussion
  • 5.4 Career Concerns - Learning
  • 5.4.1 Introduction
  • 5.4.2 The Basic Model
  • 5.4.3 Extension: Adding Innovation
  • 5.4.4 Disequilibrium - Transient Effects
  • 5.4.5 Discussion
  • V CONCLUSIONS
  • 1.1 Results
  • 1.2 Checklist
  • 1.3 Outlook.

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