Contractual form, retail price and asset characteristics
Name
28596142.pdf
Size
2.23 MB
Format
Adobe PDF
Checksum (MD5)
45b705a2dcc8870b6478c03a2411a770
Author(s)
Shepard, Andrea
Date Issued
1991
Publisher
MIT Center for Energy and Environmental Policy Research
Series/Report no.
Working paper (Massachusetts Institute of Technology. Center for Energy Policy Research) ; MIT-CEPR 91-002.
Abstract
Predictions derived from a principal-agent analysis of the manufacturer-retailer relationship are derived and tested using microdata on contractual form, outlet characteristics and retail prices for gasoline stations in Eastern Massachusetts. The empirical results are consistent with upstream firms choosing contracts that have strong incentive characteristics but less direct control when asset characteristics make unobservable effort by downstream agents important. Manufacturers trade off incentive power for more direct control when observable effort is relatively more important. Retail prices are affected by the identity of the decisionmaker and are slightly lower when the upstream firm is allowed to directly control the retail price.
Persistent DSpace Link
