Formulating Principal-Agent Service Contracts for a Revenue Generating Unit
Business & Finance, Management & Leadership, Operations Research, Nonfiction, Science & Nature, Technology, Power Resources
| Author: | Shuo Zeng, Moshe Dror | ISBN: | 9783319186726 |
| Publisher: | Springer International Publishing | Publication: | July 2, 2015 |
| Imprint: | Springer | Language: | English |
| Author: | Shuo Zeng, Moshe Dror |
| ISBN: | 9783319186726 |
| Publisher: | Springer International Publishing |
| Publication: | July 2, 2015 |
| Imprint: | Springer |
| Language: | English |
This book examines contractual options for a performance based contract between an owner of a revenue generating unit and a repair agent for such unit. The framework of the analysis is that of economists' principal-agent problem. The contractual options of a principal and an agent are modeled as a Markov process with an undetermined time horizon. For a risk neutral principal, the authors identify the conditions under which a principal contracts with a risk-neutral, risk-averse, or risk-seeking agent and derive the principal's optimal offer together with the agent's optimal service capacity response. In essence, the book provides an extensive formulating analysis of principal-agent contracts given any exogenous parameter values. Ultimately a small number of formulas cover a large spectrum of principal-agent conditions.
This book examines contractual options for a performance based contract between an owner of a revenue generating unit and a repair agent for such unit. The framework of the analysis is that of economists' principal-agent problem. The contractual options of a principal and an agent are modeled as a Markov process with an undetermined time horizon. For a risk neutral principal, the authors identify the conditions under which a principal contracts with a risk-neutral, risk-averse, or risk-seeking agent and derive the principal's optimal offer together with the agent's optimal service capacity response. In essence, the book provides an extensive formulating analysis of principal-agent contracts given any exogenous parameter values. Ultimately a small number of formulas cover a large spectrum of principal-agent conditions.
