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Title: |
An Incentive Contract with Asymmetric Information |
| Author: |
Jung, Choong-Young;
Kim, Jae-Cheol; Lee, Sang-Ho |
| Author
Affiliation: |
Electronics &
Telecommunications Research Institute; Korea Advanced Institute of
Science & Technology; Chonnam National U |
| Source: |
International Economic Journal, Spring 2000, v. 14, no. 1, pp. 99-110 |
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Publication Date: |
Spring 2000 |
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Abstract: |
This paper considers the problem of
designing an optimal incentive contract between a retailer and a
manufacturer when the former has private information about demand and
its own cost. Based on a multi-period framework, we show that the
incentive franchise contract can bring about the first-best outcome of
vertical integration when the retailer has complete information about
consumers' preferences. |
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