A consolidated model of real options, game theory and transactions costs analysis for the design of contractual arrangements

Gastón Milanesi () and Fernando Tohmé
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Gastón Milanesi: Universidad Nacional del Sur. Argentina, Departamento de Ciencias de la Administración

Revista de Economía Política de Buenos Aires, 2015, issue 14, 59-81

Abstract: In this paper we propose a framework that combines Real Option (RO), Game Theory (GT) and Transaction Cost Analysis (TCA), to build an analytical model for the agreements designs that covers contingent events. It illustrates the use of the model over a supply agreement with three scenarios: the two firsts supposes technological stability- variability combined with contractual rigidity; the third supposes technological and contractual flexibility. The results obtained showing the equilibrium between strategic flexibility benefits (RO), incentives designs that determined the agents´ behaviors (GT) and transaction cost reduction (TCA).

Keywords: Contracts; Transaction Costs; Real Options; Game Theory (search for similar items in EconPapers)
JEL-codes: C7 M1 (search for similar items in EconPapers)
Date: 2015
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