PL EN


2010 | 2 | 1 | 1-16
Article title

Tradeoff between Equity and Effciency in Revenue Sharing Contracts

Content
Title variants
Languages of publication
EN
Abstracts
EN
We investigate the problem of setting revenue sharing rules in a team production environment with a principal and two agents. We assume that the project output is binary and that the principal can observe the level of agents' actual effort, but does not know the production function. Identifying conditions that ensure the eficiency of the revenue sharing rule, we show that the rule of equal percentage markups can lead to inflation of project costs. This result provides an explanation for project cost overruns other than untruthful cost reporting.
Year
Volume
2
Issue
1
Pages
1-16
Physical description
Dates
received
2010-02-25
accepted
2010-10-05
Contributors
author
References
Document Type
Publication order reference
Identifiers
YADDA identifier
bwmeta1.element.desklight-cff3b742-126b-4e65-8408-b7093f7bdb94
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