A Structural Analysis of Simple Contracts

Yonghong An, Shengjie Hong, Daiqiang Zhang
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Abstract

This paper provides an econometric framework for analyzing simple contracts where an agent chooses between a fixed-price option and a cost-reimbursement option provided by a principal in each contracting period during possibly multiple periods. First, we propose a consistent procedure for testing the null hypothesis of a corresponding cost function being linear, which is widely assumed for tractability in the literature. Motivated by the rejection of such a null based on our empirical data, next we establish nonparametric identification, without restricting the cost function to be linear, for all model primitives conditioned on the agent exerting nonzero effort. These primitives include agent's cost and disutility functions, distribution of agent efficiency type, and parameters that characterize agent's bargaining power and intertemporal preference. Moreover we propose a consistent procedure to implement the identification results for estimation. In our empirical study, we find strong evidence against linearity of the cost function. The importance of this empirical finding is further evidenced by a welfare analysis, which shows the welfare assessment to be sensitive to the specification of cost function.
简单契约的结构分析
本文提供了一个计量经济学框架来分析简单的合同,其中代理人在每个合同期间(可能是多个期间)在委托人提供的固定价格选项和成本补偿选项之间进行选择。首先,我们提出了一个一致的过程来检验相应的成本函数是线性的零假设,这在文献中被广泛认为是可追溯的。基于我们的经验数据拒绝这样一个零的动机,接下来我们建立非参数识别,而不限制成本函数为线性,对于所有模型原语,条件是代理施加非零努力。这些原语包括代理的成本和负效用函数、代理效率类型的分布以及表征代理议价能力和跨期偏好的参数。此外,我们提出了一个一致的程序来实现估计的识别结果。在我们的实证研究中,我们发现了反对线性成本函数的有力证据。福利分析进一步证明了这一实证发现的重要性,福利评估对成本函数的规范很敏感。
本文章由计算机程序翻译,如有差异,请以英文原文为准。
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