Sales Contracts and Production Uncertainty*

Robert Drago

The Economic Record, 1992, vol. 68, issue 4, 343-350

Abstract: The paper examines production under common uncertainty where sales contracts specify penalties for under‐ or over‐production. We locate a trade‐off between high productivity and the incurrence of penalties, and identify work incentives appropriate for different cases.

Date: 1992
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https://doi.org/10.1111/j.1475-4932.1992.tb01784.x

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