The DOI matches its Crossref record; 18 of the 18 references it cites were found in a registry or an index.
Using Cost Observation to Regulate Firms
Open accessAbstract
The paper emphasizes the use of accounting data in regulatory or procurement contracts when the supplier (1) has superior information about the cost of the project and (2) invests in cost reduction. The main result states that, under risk neutrality, the supplier announces an expected cost and is given an incentive contract linear in cost overruns. This (optimal) contract moves toward a fixed-price contract as the announced cost decreases. An investment choice is then introduced and the use of a rate-of-return regulation is studied.
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Citations
Cites
Moral Hazard and Observability
Holmstrom, B. (1979) · The Bell Journal of Economics · doi:10.2307/3003320 · Cited by 8,311
Aggregation and Linearity in the Provision of Intertemporal Incentives
Holmstrom, B., & Milgrom, P. (1987) · Econometrica · doi:10.2307/1913238 · Cited by 2,859
An Analysis of the Principal-Agent Problem
Grossman, S. J., & Hart, O. D. (1983) · Econometrica · doi:10.2307/1912246 · Cited by 2,095
An Analysis of the Principal-Agent Problem
Grossman, S. J., & Hart, O. D. (1992) · Huebner International Series on Risk, Insurance and Economic Security · doi:10.1007/978-94-015-7957-5_16 · Cited by 1,913
Regulating a Monopolist with Unknown Costs
Baron, D. P., & Myerson, R. B. (1982) · Econometrica · doi:10.2307/1912769 · Cited by 1,721
Risk Sharing and Incentives in the Principal and Agent Relationship
Shavell, S. (1979) · The Bell Journal of Economics · doi:10.2307/3003319 · Cited by 1,285
Demsetz, H. (1968) · The Journal of Law and Economics · doi:10.1086/466643 · Cited by 1,023
Optimal incentive contracts with imperfect information
Harris, M., & Raviv, A. (1979) · Journal of Economic Theory · doi:10.1016/0022-0531(79)90073-5 · Cited by 942
A Model of the Demand for Investment Banking Advising and Distribution Services for New Issues
BARON, D. P. (1982) · The Journal of Finance · doi:10.1111/j.1540-6261.1982.tb03591.x · Cited by 929
The Optimal Structure of Incentives and Authority within an Organization
Mirrlees, J. A. (1976) · The Bell Journal of Economics · doi:10.2307/3003192 · Cited by 870
Cited by
Performance Contracting in After-Sales Service Supply Chains
Kim, S.-H., Cohen, M. A., & Netessine, S. (2007) · Management Science · doi:10.1287/mnsc.1070.0741 · Cited by 520
Schmalensee, R. (1989) · The RAND Journal of Economics · doi:10.2307/2555580 · Cited by 191
Maintaining quality standards in franchise chains
Gal-Or, E. (1995) · Management Science · doi:10.1287/mnsc.41.11.1774 · Cited by 57
Toward a Synthesis of Models of Regulatory Policy Design with Limited Information
Armstrong, M., & Sappington, D. E. M. (2004) · Journal of Regulatory Economics · doi:10.1023/b:rege.0000028011.71612.70 · Cited by 36
A simple regulatory incentive mechanism applied to electricity transmission pricing and investment
Hesamzadeh, M. R., Rosellón, J., Gabriel, S. A., & Vogelsang, I. (2018) · Energy Economics · doi:10.1016/j.eneco.2018.08.033 · Cited by 31
Metadata
- Authors
- Laffont, J.-J., & Tirole, J.
- Venue
- Journal of Political Economy
- Publisher
- University of Chicago Press
- Published
- 1986-06
- Volume
- 94
- Issue
- 3, Part 1
- Pages
- 614-641
- ISSN
- 0022-3808 (ISSN-L)
- 1537-534X
- OpenAlex
- W1973465190
- Cited by
- 1,206
- References
- 18
- FWCI
- 29.62
- Type
- journal article
- Language
- en
- Open access
- green
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- Laffont, J.-J., & Tirole, J. (1986). Using Cost Observation to Regulate Firms. Journal of Political Economy. https://doi.org/10.1086/261392
Data sources
Bibliographic data: Semantic Scholar, OpenAlex, Crossref.
Contains information from the Semantic Scholar Academic Graph Datasets, made available under the ODC Attribution License (ODC-BY 1.0).
Semantic Scholar’s data is described in: Kinney, R., et al. (2023). The Semantic Scholar Open Data Platform. arXiv:2301.10140.
