组织经济学与管理学ch05 Principal agent models.pptVIP

Chapter 5 Principal-agent models George Hendrikse What is wrong with the fundamental welfare theorem / Coase theorem? Nothing, but not all assumptions are satisfied, e.g. asymmetric information. Problems with property rights are due to Inadequate institutions; Inefficient structure of property, i.e. income and decision, rights. Inadequate institutions Insufficient protection of property Contracts are not enforced Inefficient structure of property rights Separation of ownership and control. e.g. manager decides while the shareholders carry the costs. One of the parties to an exchange/transaction has more complete knowledge than does the other, which asymmetry condition is costly to overcome and gives rise to a trading hazard. Sometimes markets fail for that reason. (Akerlof, 1970) Organisational responses often occur that serve to mitigate that hazard.Two responses can be distinguished:1. an incentive response (Jensen Meckling) 2. a metering response (Alchian Demsetz). Asymmetric information results in complete, instead of complete contingent, contracts. Figure 5.2: Types of contract Income and decision rights A complete contract consists only of income rights. Decision rights have no role because everything is covered and it is assumed that courts enforce contractual agreements. Complete contracting theory The analysis and solution of problems with conflicting interests. Motivation problems Conflicts of interest may result in problems of control/motivation when there is asymmetric information and players are opportunistic Figure III: Positioning of part III Self-interested versus opportunistic behaviour A self-interested person focuses on his own interests, while honouring (implicit and explicit) agreements and showing respect for others. An opportunistic person focuses on his own interests, and uses all possible means (even not honouring agreements, manipulating, cheating, stealing, etc.) to achieve them. Figure 5.8: The firm as a nexus of con