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Contract Design (contract + design)

Distribution by Scientific Domains

Business, Economics, Finance and Accounting	87%

Selected Abstracts

TECHNOLOGY TRANSFER: PARTNER SELECTION AND CONTRACT DESIGN WITH FOREIGN FIRMS IN THE INDIAN BIOTECHNOLOGY SECTORS

THE DEVELOPING ECONOMIES, Issue 1 2001
Shyama V. RAMANI
First page of article [source]

Quality Measurement and Contract Design: Lessons from the North American Sugarbeet Industry

CANADIAN JOURNAL OF AGRICULTURAL ECONOMICS, Issue 2 2004
Brent Hueth
This paper examines contracts used in the North American sugarbeet industry. Though quite similar in many respects, the contracts we study vary across processing firms in the set of quality measures used to condition contract payments to growers. This is somewhat surprising, given the homogeneous nature of the processors' finished product (refined sugar). It seems unlikely that processors differ significantly in how they value the various attributes of a sugarbeet, and such a difference is perhaps the most natural reason to expect variation in the structure of quality incentives across processors. Previous attempts to explain the observed variation in sugarbeet contracts have focused on differences in organizational form across firms. In this paper, we provide an alternative explanation that relies on variation across production regions in growers' ability to control the relevant measures of sugarbeet quality. Les auteurs se penchent sur les contrats utilisés dans l'industrie nord-américaine de la betterave sucrière. Bien qu'ils se ressemblent à maints égards, les contrats examinés varient d'un transformateur à l'autre quant au jeu de paramètres servant àévaluer la qualité du produit et à déterminer les sommes qu'on versera au producteur. La chose est surprenante étant donné le caractère homogène du produit fini (sucre raffiné). Il est peu probable que les transformateurs recourent à des méthodes fort différentes pour évaluer les paramètres de la betterave. Or, ce facteur constituerait normalement la raison la plus plausible pour expliquer la variation des incitatifs auxquels recourent les transformateurs Antérieurement, on a tenté d'expliquer les écarts relevés dans les contrats par les différences dans l'organisation des entreprises. L'article que voici propose une autre explication s'appuyant sur la compétence variable des producteurs à respecter les critères de qualité de la betterave sucrière selon la région. [source]

Incentives and the Efficiency of Public Sector-outsourcing Contracts

JOURNAL OF ECONOMIC SURVEYS, Issue 5 2005
Paul H. Jensen
Abstract., Outsourcing the provision of traditionally publicly provided services has become commonplace in most industrialized nations. Despite its prevalence, there still is no consensus in the academic literature on the magnitude (and determinants) of expected cost savings to the government, nor the sources of those savings. This article considers the arguments for (and against) outsourcing and then examines the empirical evidence pertaining to whether any observed savings occur and whether they persist over time. In addition, we examine the existing evidence for the ,redistribution hypothesis' and the ,quality-shading hypothesis', which critics have used to argue that outsourcing lowers government expenditure by lowering wages and conditions and/or lower quality services. Finally, we consider the impact of contract design on outsourcing outcomes. While the power of incentives is a strong theme in economics, recent work has suggested that high-powered incentives may be suboptimal for many public sector services, because they may crowd out intrinsic motivation, particularly in instances where agents are highly motivated. We discuss the implications of this insight for the efficiency of public sector outsourcing. [source]

Exchange traded contracts for difference: Design, pricing, and effects,

THE JOURNAL OF FUTURES MARKETS, Issue 12 2010
Christine Brown
Contracts for Difference (CFDs) are a significant financial innovation in the design of futures contracts. Over-the-counter trading in the UK is significant and has created controversy, but there is no published academic research into the design, pricing, and effects of CFDs. This study analyzes CFD contract design and pricing. It uses a unique database of trades and quotes on exchange traded equity CFDs introduced by the Australian Securities Exchange to test theoretical pricing relationships, and draws out implications for successful design and trading arrangements for the introduction of new derivative contracts. © 2010 Wiley Periodicals, Inc. Jrl Fut Mark [source]

Tick size reduction, execution costs, and informational efficiency in the regular and E-mini Nasdaq-100 index futures markets

THE JOURNAL OF FUTURES MARKETS, Issue 9 2008
Alexander Kurov
On April 2, 2006, the Chicago Mercantile Exchange reduced the minimum tick size of the floor-traded and E-mini Nasdaq-100 futures from 0.5 to 0.25 index points. This study examines the effect of this change in the contract design on execution costs, informational efficiency, and price discovery. The results show a significant reduction in the effective spreads in both of the contract markets but especially in the electronically traded E-mini futures. The paper also finds that the tick size reduction has improved price discovery and informational efficiency in the E-mini futures market. © 2008 Wiley Periodicals, Inc. Jrl Fut Mark 28:871,888, 2008 [source]

Does an index futures split enhance trading activity and hedging effectiveness of the futures contract?

THE JOURNAL OF FUTURES MARKETS, Issue 12 2006
Lars Nordén
Recently, several stock index futures exchanges have experimented with an altered contract design to make the contract more attractive and to increase investor accessibility. In 1998, the Swedish futures exchange (OM) split the OMX-index futures contract with a factor of 4:1, without altering any other aspect of the futures contract design. This isolated contract redesign enables a ceteris paribus analysis of the effects of a futures split. The purpose is to investigate whether the futures split affects the futures market trading activity, as well as hedging effectiveness and basis risk of the futures contract. A bivariate GARCH framework is used to jointly model stock index returns and changes in the futures basis, and to obtain measures of hedging efficiency and basis risk. Significantly increased hedging efficiency and lower relative basis risk is found following the split. In addition, evidence of an increased trading volume is found after the split, whereas the futures bid-ask spread appears to be unaffected by the split. The results are consistent with the idea that the futures split has enhanced trading activity and hedging effectiveness of the futures contract, without raising the costs of transacting at the futures market. © 2006 Wiley Periodicals, Inc. Jrl Fut Mark 26:1169,1194, 2006 [source]

The effectiveness of coordinating price limits across futures and spot markets

THE JOURNAL OF FUTURES MARKETS, Issue 6 2003
Pin-Huang Chou
We extend the work of Brennan (1986) to investigate whether the imposition of spot price limits can further reduce the default risk and lower the effective margin requirement for a futures contract that is already under price limits. Our results show that spot price limits do indeed further reduce the default risk and margin requirement effectively. In addition, the more precise the information is that comes from the spot market, the more the spot price limit rule constrains the information available to the losing party. The default probability, contract costs, and margin requirements are then lowered to a greater degree. Furthermore, for a given margin, both spot price limits and futures price limits can partially substitute for each other in ensuring contract performance. The common practice of imposing equal price limits on both the spot and futures markets, though not coinciding with the efficient contract design, has a lower contract cost and margin requirement than that without imposing spot price limits. © 2003 Wiley Periodicals, Inc. Jrl Fut Mark 23:577,602, 2003 [source]

Microeconometric analysis of wine grape supply contracts in Australia,

AUSTRALIAN JOURNAL OF AGRICULTURAL & RESOURCE ECONOMICS, Issue 1 2005
Iain Fraser
This paper examines wine grape supply contracts used in the main grape growing regions of Australia. An empirical analysis provides insight into specific aspects of contract design and implementation. Statistical analyses of sample data reveal differences between regions in contract specifications. Lower quality grape growing regions place a greater reliance on grape quality assessment to determine bonus/penalty payments compared to higher quality regions. Contracts in higher quality regions place greater emphasis on explicit winery involvement and direction in vineyard management. Results indicate that longer duration contracts are more inclusive in terms of the number of clauses included. Evidence of risk shifting (i.e., winery to grower) for high quality grapes is reported, where the price received by growers is determined by the bottle price of the wine produced. [source]