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Multitask Agency and Contract Choice: An Empirical Exploration

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Author Info
Slade, Margaret E

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Abstract

The multitask-agency problem is examined empirically using contracts between private, integrated oil companies and their service stations in the city of Vancouver. The empirical tests assess how variations in the characteristics of one task affect the choice of agent-compensation scheme for another. Comparative statics from the model predict that higher-powered incentives will be offered for gasoline sales when the secondary activity is not highly complementary with gasoline retailing, where complementarity is measured by the cross-price demand effect, the covariation in uncertainty, and the degree of effort substitutability. Copyright 1996 by Economics Department of the University of Pennsylvania and the Osaka University Institute of Social and Economic Research Association.

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Article provided by Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association in its journal International Economic Review.

Volume (Year): 37 (1996)
Issue (Month): 2 (May)
Pages: 465-86
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Handle: RePEc:ier:iecrev:v:37:y:1996:i:2:p:465-86

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  1. Pablo Casas-Arce & Santhi Hejeebu, Cornell College, 2004. "Job Design and the Benefits of Private Trade," Economics Series Working Papers 204, University of Oxford, Department of Economics. [Downloadable!]
  2. Masaki Nakabayashi, 2005. "Hedonic prices and multitask incentives," Discussion Papers in Economics and Business 05-32, Osaka University, Graduate School of Economics and Osaka School of International Public Policy (OSIPP).
  3. Iain Cockburn & Rebecca Henderson & Scott Stern, 1999. "Balancing Incentives: The Tension Between Basic and Applied Research," NBER Working Papers 6882, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  4. Chiappori, Pierre Andre & Salanie, Bernard, 2002. "Testing Contract Theory: A Survey of Some Recent Work," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
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  5. Richard Gilbert & Justine Hastings, 2001. "Vertical Integration in Gasoline Supply: An Empirical Test of Raising Rivals' Costs," Department of Economics, Working Paper Series 1011, Department of Economics, Institute for Business and Economic Research, UC Berkeley. [Downloadable!]
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  6. George Baker P. & Thomas N. Hubbard, 2001. "Empirical Strategies in Contract Economics: Information and the Boundary of the Firm," American Economic Review, American Economic Association, vol. 91(2), pages 189-194, May. [Downloadable!] (restricted)
  7. Masaki Nakabayashi, 2005. "Hedonic prices and multidimensional incentives," Discussion Papers in Economics and Business 05-32-Rev.2, Osaka University, Graduate School of Economics and Osaka School of International Public Policy (OSIPP), revised May 2006. [Downloadable!]
  8. Gerhard Clemenz & Klaus Gugler, 2002. "Locational choice and price competition: Some empirical results for the Austrian retail gasoline market," Vienna Economics Papers 0206, University of Vienna, Department of Economics. [Downloadable!]
  9. Dudian Monica & Trasca Daniela & Mitrache Andreea & Georgescu Adriana & Georgescu Adriana, 2008. "The Boundaries Of The Firm. The Case Of Oil Industry In Romania," Annals of Faculty of Economics, University of Oradea, Faculty of Economics, vol. 2(1), pages 112-117, May. [Downloadable!]
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