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Author : Pamela Clark Brown
Publisher :
ISBN 13 :
Total Pages : 340 pages
Book Rating : 4.:/5 (249 download)
Download or read book Design of Optimal Procurement Contracts that Allow Risk-sharing written by Pamela Clark Brown and published by . This book was released on 1984 with total page 340 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Author : Demi Chung
Publisher :
ISBN 13 :
Total Pages : 59 pages
Book Rating : 4.:/5 (861 download)
Download or read book Contractual Approach to Optimising Risk Sharing written by Demi Chung and published by . This book was released on 2013 with total page 59 pages. Available in PDF, EPUB and Kindle. Book excerpt: Public-Private-Partnerships (PPPs) are a public procurement policy that argues in support of greater value for money through optimal risk-sharing, by aligning incentives among parties who are profoundly different in terms of interests, objectives and risk preferences. The subject of interest in this thesis is tollroads that are procured under the PPP method, which traditionally involves the transfer of demand risk to the private sector. Designing contracts to share risk in light of incentive problems is the central premise of contract theory, yet the risk-sharing implications have rarely been adequately tested using micro data at the decision-maker level. In addition, empirical contract studies tend to ignore the risk preferences of contracting parties or assume that the stereotypical risk-averse agent and risk-neutral principal are present in all contractual relationships. This thesis addresses these shortcomings by presenting the methodology and empirical findings of an online survey within which a stated choice experiment was designed to capture the risk perceptions of contracting parties to a number of hypothetical PPP tollroad concessions. Information from 101 participants drawing on their project experience over 32 countries was collected within an advanced computer-aided personal survey instrument, to condition model estimates on observing the manner in which respondents processed the information presented to them to test the impact of contractual conditions and external institutional variables on their risk preferences, and hence their choice behaviour. While the findings of this thesis support the concept that risk-sharing in PPPs is in line with contract theory’s incentive alignment proposition, they refute the common belief in contract theory with respect to stereotypical economic actors. Moreover, the results demonstrate the powerful incentive effect of property rights to ex post surplus. There are a number of significant implications as to the design of contracts and reform of public policy if PPPs are to gain popularity and to attain value for money. To induce appropriate ex post performance efficiency, ex ante property rights need to be complemented with equitable risk-sharing among contracting parties. Uptake of the policy by the market can be enhanced by modifications to the identified institutional variables and contractual conditions. Finally, the thesis appeals to the theories of decision making to further pursue the influence of human cognition, particularly bounded rationality, on our decision choices.
Author : Sudhi Seshadri
Publisher : Springer Science & Business Media
ISBN 13 : 0387251839
Total Pages : 324 pages
Book Rating : 4.3/5 (872 download)
Download or read book Sourcing Strategy written by Sudhi Seshadri and published by Springer Science & Business Media. This book was released on 2005-12-05 with total page 324 pages. Available in PDF, EPUB and Kindle. Book excerpt: Sourcing Strategy is about sourcing as a long term strategic activity. Myopic purchasing management stops short with describing functional procedures and procedural innovations such as online order processing. The goal of this book is not merely to document sourcing strategy, but to provide the tools to determine it. Therefore, rather than merely describe common sourcing processes, the book takes a normative approach to sourcing strategy. It argues for a rational, complete and integrated process view. It supports its recommendations with logical arguments from an interdisciplinary and analytical approach grounded in microeconomics, law and business strategy. Part 1 of the book explains the economic and business principles that underlie sourcing strategies. It derives policies that guide viable strategies to meet sourcing goals. Part 2 applies these to creative designs for standard sourcing scenarios.
Author : Tai-Yeong Chung
Publisher : London : Department of Economics, University of Western Ontario
ISBN 13 :
Total Pages : 36 pages
Book Rating : 4.:/5 (318 download)
Download or read book Risk Sharing, Specific Investment and Incomplete Contracts written by Tai-Yeong Chung and published by London : Department of Economics, University of Western Ontario. This book was released on 1990 with total page 36 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Author : Young-Ho Seo
Publisher :
ISBN 13 :
Total Pages : 368 pages
Book Rating : 4.:/5 (282 download)
Download or read book Analysis of Military Procurement Contracts that Allow Risk-sharing Under Adverse Selection written by Young-Ho Seo and published by . This book was released on 1993 with total page 368 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Author : Douglas Gale
Publisher :
ISBN 13 :
Total Pages : 54 pages
Book Rating : 4.:/5 (289 download)
Download or read book Optimal Risk Sharing Through Renegotiation of Simple Contracts written by Douglas Gale and published by . This book was released on 1990 with total page 54 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Author :
Publisher :
ISBN 13 :
Total Pages : 18 pages
Book Rating : 4.:/5 (916 download)
Download or read book Optimal Risk-Sharing and incentive contracts with two stages of risk written by and published by . This book was released on 1989 with total page 18 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Author : Nicola Dimitri
Publisher : Cambridge University Press
ISBN 13 : 1139459252
Total Pages : 529 pages
Book Rating : 4.1/5 (394 download)
Download or read book Handbook of Procurement written by Nicola Dimitri and published by Cambridge University Press. This book was released on 2006-09-28 with total page 529 pages. Available in PDF, EPUB and Kindle. Book excerpt: How can organizations ensure that they can get best value for money in their procurement decisions? How can they stimulate innovations from their dedicated suppliers? With contributions from leading academics and professionals, this 2006 handbook offers expert guidance on the fundamental aspects of successful procurement design and management in firms, public administrations, and international institutions. The issues addressed include the management of dynamic procurement; the handling of procurement risk; the architecture of purchasing systems; the structure of incentives in procurement contracts; methods to increase suppliers' participation in procurement contests and e-procurement platforms; how to minimize the risk of collusion and of corruption; pricing and reputation mechanisms in e-procurement platforms; and how procurement can enhance innovation. Inspired by frontier research, it provides practical recommendations to managers, engineers and lawyers engaged in private and public procurement design.
Author : Qiang Li
Publisher :
ISBN 13 : 9781361033739
Total Pages : pages
Book Rating : 4.0/5 (337 download)
Download or read book Integrating Commodity Futures in Procurement Planning and Contract Design with Demand Forecast Update written by Qiang Li and published by . This book was released on 2017-01-26 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This dissertation, "Integrating Commodity Futures in Procurement Planning and Contract Design With Demand Forecast Update" by Qiang, Li, 李強, was obtained from The University of Hong Kong (Pokfulam, Hong Kong) and is being sold pursuant to Creative Commons: Attribution 3.0 Hong Kong License. The content of this dissertation has not been altered in any way. We have altered the formatting in order to facilitate the ease of printing and reading of the dissertation. All rights not granted by the above license are retained by the author. Abstract: This study aims at investigating the benefits of integrating commodity futures contracts in devising commodity procurement policies as well as the design of supply contracts. To achieve this, a two-tier decentralised supply chain with uncoordinated risk transfer behaviours is studied. Specifically, the supply chain consists of a risk-neutral manufacturer (he) and a risk-averse retailer (she), where both players maximise their own objective functions by utilising the demand forecast update over the planning horizon. The mean-variance utility is employed to capture the retailer''s risk aversion behaviour. For the first objective, this study considers a commodity procurement problem for the risk-neutral manufacturer. It shows that partially procuring in the forward market is potentially beneficial because the logistics costs tend to be larger for tighter delivery schedule and vice versa. Existing literature has studied the value of forward procurement. This study further explores the value of the dynamic adjustment in the forward (futures) market in response to the demand information update. Specifically, when the joint distribution of demand and new information is a bivariate normal distribution, the optimal procurement policy is characterized analytically. The second objective is studied within the supply chain setting, where the manufacturer is assumed to be the Stackelberg leader. Recently, various financial hedging strategies have been developed to mitigate the price risks for firms which directly procure commodities for their operations. However, few, if any, studies have addressed the integration of financial hedging with supply contract design so that the risk exposure faced by the downstream player in the supply chain could be partially hedged. Although the downstream retailer does not procure any commodity directly, she may suffer from the commodity price volatility propagated from the upstream manufacturer. By formulating the problem as a dynamic program, a flexible contract with time-consistent closed-form financial hedging policy is derived. Numerical experiments are carried out to demonstrate the benefits gained by integrating the commodity futures contract with supply chain decision making. In the implementation, the short-term/long-term model developed by Schwartz and Smith is adopted to describe the stochastic behaviour of the price. Moreover, to preclude any risk-free arbitrage opportunity, the risk-neutral version of the model is employed. To take full advantage of the historical commodity price data, the smoother-based approach, rather than filter-based approach, is adopted to estimate the latent parameters of the stochastic price processes. For the manufacturer, it is shown that the value of the futures market is significant in the presence of logistics cost. Moreover, extra value could be obtained by adjusting the position in futures contracts in response to the newly observed information. For the decentralised supply chain, compared with the wholesale price contract, it is shown that the proposed flexible contract could improve the performance of the supply chain by leading to higher payoffs for both firms. Furthermore, the results show that flexible contract with financial hedging is effective on mitigating the commodity price risk exposure transferred from the manufacturer to the retailer when measured by standard deviation (SD), value-a
Author : Malin Arve
Publisher :
ISBN 13 :
Total Pages : 191 pages
Book Rating : 4.:/5 (8 download)
Download or read book Dynamic Issues in Procurement and Contract Theory written by Malin Arve and published by . This book was released on 2011 with total page 191 pages. Available in PDF, EPUB and Kindle. Book excerpt: This thesis consists of four chapters. The first chapter investigates the effect of making an irreversible decision in an uncertain environment. Irreversible initial provision levels can be supplemented according to the true surplus generated by the provision. With add-ons, the first-period provision will be lower than when no additional adjustments are possible. Thesecond chapter studies the implications of risk aversion on an optimal procurement contractfor a basic service and an add-on. Ex ante there is incomplete information about the add-onand agents are risk averse. We characterize the effect on contract design of risk stemmingfrom this incomplete information. We show that the level of the basic service and the add-onact as substitutes in solving the incentive problem and risk-aversion leads to less distortion inboth levels compared to the risk-neutral case. The third chapter studies dynamic procurement design and the effect of bankruptcy risk on this design. Firms differ in their ability to self financetheir presence in the market. I study the optimal financial contract for the firm in needof funding as well as the optimal procurement contract. Because of the bankruptcy risk, the procurement contract will reflect a trade-off between industry policy which aims at stimulating activity in a sector, and competition policy which focuses on keeping prices as low as possible. The last chapter illustrates the link between chapter 2 and 3 by showing that firmbehavior under risk-aversion à la Yaari (1987) can be derived as an indirect utility when arisk-neutral firm faces liquidation risk.
Author : Malin Arve
Publisher :
ISBN 13 :
Total Pages : 191 pages
Book Rating : 4.:/5 (869 download)
Download or read book Dynamic Issus in Procurment and Contract Theory written by Malin Arve and published by . This book was released on 2011 with total page 191 pages. Available in PDF, EPUB and Kindle. Book excerpt: This thesis consists of four chapters. The first chapter investigates the effect of making an irreversible decision in an uncertain environment. Irreversible initial provision levels can be supplemented according to the true surplus generated by the provision. With add-ons, the first-period provision will be lower than when no additional adjustments are possible. The second chapter studies the implications of risk aversion on an optimal procurement contract for a basic service and an add-on. Ex ante there is incomplete information about the add-on and agents are risk averse. We characterize the effect on contract design of risk stemming from this incomplete information. We show that the level of the basic service and the add-on act as substitutes in solving the incentive problem and risk-aversion leads to less distortion in both levels compared to the risk-neutral case. The third chapter studies dynamic procurement design and the effect of bankruptcy risk on this design. Firms differ in their ability to self-finance their presence in the market. I study the optimal financial contract for the firm in need of funding as well as the optimal procurement contract. Because of the bankruptcy risk, the procurement contract will reflect a trade-off between industry policy which aims at stimulating activity in a sector, and competition policy which focuses on keeping prices as low as possible. The last chapter illustrates the link between chapter 2 and 3 by showing that firm behavior under risk-aversion à la Yaari (1987) can be derived as an indirect utility when a risk-neutral firm faces liquidation risk.
Author : R.J. Aumann
Publisher : North Holland
ISBN 13 :
Total Pages : 768 pages
Book Rating : 4.3/5 (91 download)
Download or read book Handbook of Game Theory with Economic Applications written by R.J. Aumann and published by North Holland. This book was released on 1992-11-19 with total page 768 pages. Available in PDF, EPUB and Kindle. Book excerpt: This is the first volume of the Handbook of Game Theory with Economic Applications, to be followed by two additional volumes. Game Theory has developed greatly in the last decade, and today it is an essential tool in much of economic theory. The three volumes will cover the fundamental theoretical aspects, a wide range of applications to economics, several chapters on applications to political science, and individual chapters on relations with other disciplines. The topics covered in the present volume include chess-playing computers, an introduction to the non-cooperative theory, repeated games, bargaining theory, auctions, location, entry deterrence, patents, the cooperative theory and its applications, and the relation between Game Theory and ethics. For more information on the Handbooks in Economics series, please see our home page on http://www.elsevier.nl/locate/hes
Author : Abhijeet Ghadge
Publisher :
ISBN 13 :
Total Pages : 0 pages
Book Rating : 4.:/5 (137 download)
Download or read book Using Risk Sharing Contracts for Supply Chain Risk Mitigation written by Abhijeet Ghadge and published by . This book was released on 2016 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: The paper aims to understand buyer-supplier power and dependence scenarios following a risk sharing contract. The study develops a supply chain risk sharing contract to mitigate demand uncertainty and price volatility related risks in a globalised business environment. An integer programming model is developed and analysed following an automotive case study to generate insights into buyer-supplier relationships. Multiple buyer-supplier power and dependence scenarios are considered to reflect the possible leverages involved in the decision-making. The situational strength evaluated through buyer-supplier power and dependence illuminates the inherent complexity in contract negotiation. Thus there is an evident need to develop risk sharing contracts for mitigating global risks. The developed relationship framework and risk sharing contract model are expected to help SC managers in better understanding behavioural aspects during contract negotiations. The risk sharing contract model proposed here also contributes to a potentially novel perspective on existing theory in buyer-supplier power and dependence by providing a relational perspective on the dynamics of supply chain design and collaboration.
Author : Robert J. Aumann
Publisher :
ISBN 13 :
Total Pages : 768 pages
Book Rating : 4.:/5 (318 download)
Download or read book Handbook of Game Theory with Economic Applications: Game of chess written by Robert J. Aumann and published by . This book was released on 1992 with total page 768 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Author : Taichi Kimura
Publisher :
ISBN 13 :
Total Pages : 34 pages
Book Rating : 4.:/5 (13 download)
Download or read book Government Procurement Contract Design with Unobservable Productivity and Moral Hazard written by Taichi Kimura and published by . This book was released on 2019 with total page 34 pages. Available in PDF, EPUB and Kindle. Book excerpt: This study investigates the optimal incentive structure for a government procurement contract in the field of defense. Optimality implies that the government achieves efficient and cost-effective procurement through incentives that encourage the contracting firm to reduce costs in the presence of both moral hazard and adverse selection. To investigate the optimal contract scheme when moral hazard and adverse selection occur simultaneously, we employ a hybrid model of moral hazard and adverse selection. Our analysis shows that a low--powered incentive is optimal when the firm's productivity is unobservable and that the incentive rate is lower in the hybrid case than in the pure moral hazard case. This is because the government must pay informational rent to the firm to ensure that the firm is honest. We also find that the optimal incentive rate increases as the degree of information asymmetry decrease.
Author : David P. Baron
Publisher :
ISBN 13 :
Total Pages : 43 pages
Book Rating : 4.:/5 (819 download)
Download or read book Risk Sharing in Procurement Contracting written by David P. Baron and published by . This book was released on 1985 with total page 43 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Author : Guofu Tan
Publisher :
ISBN 13 :
Total Pages : 152 pages
Book Rating : 4.:/5 (269 download)
Download or read book Optimal Procurement and Contracting with Research and Development written by Guofu Tan and published by . This book was released on 1990 with total page 152 pages. Available in PDF, EPUB and Kindle. Book excerpt: Government procurement of a new good or service is a process that usually includes basic research, development, and production. Empirical evidences indicate that investments in research and development (R and D) before production are significant in many defense procurements. Thus, optimal procurement policy should not be only to select the most efficient producer, but also to induce the contractors to design the best product and to develop the best technology. It is difficult to apply the current economic theory of optimal procurement and contracting, which has emphasized production, but ignored R and D, to many cases of procurement. In this thesis, I provide basic models of both R and D and production in the procurement process where a number of firms invest in private R and D and compete for a government contract. R and D is modeled as a stochastic cost-reduction process. The government is considered both as a profit-maximizer and a procurement cost minimizer. In comparison to the literature, the following results derived from my models are significant. First, R and D matters in procurement contracting. When offering the optimal contract the government will be better off if it correctly takes into account costly private R and D investment. Second, competition matters. The optimal contract and the total equilibrium R and D expenditures vary with the number of firms. The government usually does not prefer infinite competition among firms. Instead, it prefers free entry of firms. Third, under a R and D technology with the constant marginal returns-to-scale, it is socially optimal to have only one firm to conduct all of the R and D and production. Fourth, in an independent private values environment with risk-neutral firms, an informed government should select one of four standard auction procedures with an appropriate announced reserve price, acting as if it does not have any private information.
