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Relational Incentive Contracts

James Malcomson ()

No 508, Economics Series Working Papers from University of Oxford, Department of Economics

Abstract: This chapter reviews the literature on the theory of relational incentive contracts. It motivates the discussion by the classic applications of relational contracts to the GM-Fisher Body relationship and the relationships between Japanese automobile manufacturers and their subcontractors. It presents basic models with symmetric information to illustrate the fundamental issues and then goes on to consider specific investments, the role of legally enforceable contracts alongside relational contracts, private information, multiple suppliers, and issues of organization design.

Keywords: Relational contracts; informal enforcement; legal enforcement; incentives; private information; partnerships; vertical integration; organization design (search for similar items in EconPapers)
JEL-codes: D21 D23 D82 D86 L14 L22 L23 L24 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-bec and nep-cta
Date: 2010-10-01
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Chapter: Relational Incentive Contracts (2012)
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