A carregar...
Publicação
Sponsor's Precommitment Capability and Allocative Efficiency in the Construction of Long Term Projects
Autores
Orientador(es)
Resumo(s)
We consider a repeated contract game between a sponsor and a contractor concerning a large scale project where the project requires a number of tasks to be completed before the benefit from the project can be realized. There is cost uncertainty and the contractor has private, task specific information which is relevant in cost determination. Moreover the contractor supplies effort which affects the cost of completing a task. We focus on the case where the sponsor cannot precommit to compensation per task and where the contractor is not bound to complete the project. We show that, in this case, inefficiency may arise, since the sponsor may cancel the project in instances where it would be socially optimal to fund the project. In other words, there may be real social costs when the sponsor is uncapable of making a credible commitment at project initiation to the compensation schedule it will honor over the lifetime of the project.
Descrição
Palavras-chave
Contexto Educativo
Citação
Leite, António, Sponsor's Precommitment Capability and Allocative Efficiency in the Construction of Long Term Projects (January, 1989). FEUNL Working Paper Series No. 111