Golden parachutes: credible commitments or evidence of shirking?

Falaschetti, Dino

doi:10.1016/s0929-1199(01)00032-3

Cited by 22 publications

(11 citation statements)

References 15 publications

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“…The theory of believable promises [22] indicates that a party that assumes a promise is believable given certain conditions -basically, the existence of formal, binding rules -and is required to fulfil the promise because that is the most convenient course of action. This course of action should culminate in compliance due to the structure of incentives and sanctions defined in advance, since the sanctions attracted by the opportunistic behaviour of noncompliance represent a great cost to profit.…”

Section: Belief In Inefficiency and Corruption Of Suppliers (V4)mentioning

confidence: 99%

Socio-Technical Factors in Electronic Software Biddings

Hochstetter

García

Cares

2019

J. theor. appl. electron. commer. res.

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Outsourcing of services has been an industry trend for more than two decades. In particular, public software acquisitions have followed this trend. Governments are significant consumers of software and these processes may fail due to different causes such as incomplete requirements elicitation, limited budget, lack of tenderers or even proper tenderers. Moreover, the fact of there being only one qualified tenderer may make the process suspect. The aim of this paper is to identify the variables which influence the result of a software tender process. We present a two-step research: first a quantitative approach and then a qualitative analysis. Initially we formulated the hypothesis that the quality of documents in public software tenders was related to the success of the bidding process. We studied 142 public tenders in Chile, which neither confirmed nor denied any relationship between success and quality of the tender document. In the second step, we applied a focus group and a semi-structured online questionnaire identifying N new potentially factors to success. For them, we found social theories supporting these relationships. The main contribution of this work is to propose a wider set of variables, not merely technical ones, which influence the success of software tender processes.

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Section: Belief In Inefficiency and Corruption Of Suppliers (V4)mentioning

confidence: 99%

Socio-Technical Factors in Electronic Software Biddings

Hochstetter

García

Cares

2019

J. theor. appl. electron. commer. res.

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“…Unlike what happens to public employees, governments face a cost (− x ) for using bureaucratization: they must pay employees for life, and they lose the flexibility to respond to external shocks that demand fast changes to the size and the composition of the civil service. Bureaucratization, thus, plays the role that Falaschetti (2002, 165) attributes to hand‐tying institutions: mechanisms that cannot totally eliminate principals' moral hazard but that increase the cost of acting opportunistically. In general, bureaucratization prevents best and worst outcomes for both players, and it can be seen as a second‐best option that is preferred when the best solution involves too many risks for the actors.…”

Section: The Credible Commitment Game Between Government and Scientistsmentioning

confidence: 99%

“…5 5 Van der Meulen (1998) suggests that repeated games could provide stability to the government‐scientists relationship, along with other intermediate institutions, but he finds that a pure game is unstable. As suggested by political economists, ultimately no clear predictions may be derived from repeated games, because of the implications of the Folk Theorem (see Falaschetti 2002, 163). We follow these authors in considering that, at least initially, one‐shot games are the best way of tackling the game‐theoretic interaction among actors.…”

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confidence: 99%

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Political Regimes, Bureaucracy, and Scientific Productivity

Lapuente

Fernández-Carro

2008

Politics & Policy

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Can a scientist trust that the government is going to pay him or her fairly? In the science–government relationship, an incumbent may be better off if he or she does not provide—or does not provide a fair pay to public scientists. We propose a simple game‐theoretic model for understanding the trust problem in the relationship between governments and scientists. The model shows how with reliable governments (democracies), bureaucratic contracts (e.g., secure tenure) are not optimal since they have low‐powered incentives (in contrast to the high‐powered private‐sector type of contracts) and run against scientists' responsiveness to government demands. However, with nonreliable governments (dictatorships), bureaucratic contracts are second‐best solutions because they protect scientists against the possibility of governments' misbehavior (i.e., ex post opportunistic defections, such as canceling research programs overnight). An empirical analysis confirms the predictions: bureaucratic contracts enhance scientific productivity with nonreliable governments (dictatorships) but hamper scientific productivity with reliable governments (democracies).

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“…According to the team theory, external agents are necessary to induce efficient equilibrium in team production settings. However, while external agents may be necessary, they cannot sustain an efficient outcome if the internal members of the team don't have some assurance that their product will not be expropriated (Falaschetti 2002). According to Köke (2001), ownership concentration and bank debt, as well as market discipline reflected by product market competition, are positively related to productivity growth.…”

Section: Relationship Intermediation As Team Productionmentioning

confidence: 99%

Corporate control and relationship finance by banks or by non-bank institutional investors? A review within the theory of the firm

Andreani¹,

Neuberger²

2006

COC

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In continental Europe, banks are more and more replaced by non-bank institutional investors in the financing and control of firms, which may imply a shift from relationship finance with insider control to arm's length finance with outsider control. However, non-bank institutional investors may develop relationships with firms similar to the traditional long-term bank-firm relationship, providing substitutive services. The present paper differentiates between relationship banking and relationship investing within the theory of the firm and reviews the financial and corporate control services provided by both arrangements.

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Golden parachutes: credible commitments or evidence of shirking?

Cited by 22 publications

References 15 publications

Socio-Technical Factors in Electronic Software Biddings

Socio-Technical Factors in Electronic Software Biddings

Political Regimes, Bureaucracy, and Scientific Productivity

Corporate control and relationship finance by banks or by non-bank institutional investors? A review within the theory of the firm

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