search query: @author Laffont, J. J. / total: 7
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| Author: | Laffont, J. J. |
| Title: | Toward a normative theory of incentive contracts between government and private firms. |
| Journal: | Economic Journal
1987 : VOL. 97, CONFERENCE PAPERS SUPPL. , p. 17-31 |
| Index terms: | GOVERNMENT CONTRACTING COMPETITIVE BIDDING |
| Language: | eng |
| Abstract: | About one sixth of national income is spent by local or national governments using contracts directly made with firms. The most popular are so-called incentive contracts: the payment made to the firm realizing a project is the sum of a fixed part function of the announced expected cost and of a linear sharing of the overrun. There is a coefficient which defines this linear sharing rule. Through a normative theory the optimal incentive schemes are derived. In the model the trade-offs between information transmission,risk sharing and ex-post efficiency are studied. |
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