Reputation, Incentives, and Transaction Costs in Firms

该提案包括两个独立的项目，它们共同有助于理解影响企业激励的机制。第一个项目调查声誉市场如何影响企业所有者/经营者的激励。这个问题不同于调查个人声誉的标准声誉文献。研究人员将使用他的公司声誉作为可交易资产的模型作为起点。在该模式中，没有处理奖励问题，也无法分析所涉福利或政策问题。通过将先前的模型扩展到道德风险，出现了一些有趣的结果和猜想。首先，这与职业关注文献和信号文献之间的关系提供了一个有用的基准。然而，与简单的职业关注模型不同，声誉市场将能够为处于职业生涯末期的经纪人提供激励。事实上，一个经纪人年轻时所面临的职业关注激励的“强度”与他年老时市场对声誉的激励强度是一样的。然后概述了一些推测、政策影响、扩展和未来的工作途径。第二个项目关注的是激励和交易成本在著名的“制造或购买”决策中的作用：一个部件应该在公司生产还是在整个市场上采购？自科斯的开创性论文发表以来，这个问题受到了广泛关注，随后威廉森发展了交易成本经济学，格罗斯曼、哈特和摩尔等研究人员发展了产权方法。研究人员建议用他（与Patrick Bajari）最近开发的采购模型的一个变体来为这一文献做出贡献。在该模型中，买方需要雇佣一个卖方，卖方将交付定制商品（例如，房屋、工厂、航天飞机等），该模型的动机和信息来自建筑行业的程式化事实。买方必须首先承担提供全面设计的成本，并且面临着提供激励和减少由于昂贵的重新谈判而导致的事后交易成本之间的权衡。这种方法表明，当项目更复杂时，弱激励比强激励更受欢迎。这一建议似乎表明，将该模型应用于制造或购买采购决策可能有助于解释为什么当产品更复杂时，内部生产主导市场采购。这与一些著名的实证工作是一致的，并将为交易成本经济学提供基础。概述了可以这样做的方向。

This proposal includes two separate projects that together contribute to understanding mechanisms that affect incentives in firms. The first project investigates how the market for reputations can affect incentives of firm owner/operators. This problem is different from the standard reputation literature that investigates individual reputations. The researcher will use his model of firm reputations as tradeable assets as the starting point. In that model the issue of incentives was not addressed and no welfare or policy implications could be analyzed. By extending the previous model to include moral hazard, some interesting results and conjectures arise. First, there is a relationship with the Career Concerns literature and the signaling literature that provides a useful benchmark. However, unlike in a simple career concerns model, the market for reputations will be able to provide incentives for agents in terminal stages of their career. In fact, the "strength" of career concern incentives that an agent faces when he is young is the same as the strength of incentives created by the market for reputations when he is old. Some conjectures, policy implications, extensions and future avenues for work are then outlined.The second project is concerned with the role of incentives and transaction costs with respect to the celebrated make-or-buy decision: should a component be produced in the firm or procured across the market? This question has received much attention since Coase's seminal paper and was followed up by Williamson's development of Transaction Cost Economics, and by the Property Rights approach developed by such researchers as Grossman, Hart, and Moore. The researcher proposes to contribute to this literature with a variant of a procurement model that he (together with Patrick Bajari) has recently developed. In that model, which is motivated and informed by stylized facts from the construction industry, a buyer needs to hire a seller that will deliver a custom made good (e.g., house, factory, space shuttle, etc.). The buyer must first incur a cost of providing a comprehensive design, and is faced with a trade-off between providing incentives and reducing ex post transaction costs due to costly renegotiation. This approach shows that weak incentives are preferred over strong incentives when a project is more complex. This proposal seems to indicate that applying the model to the make-or-buy procurement decision may help explain why internal production dominates market procurement when the product is more complex. This is consistent with some well known empirical work, and would provide foundations for Transaction Cost Economics. Directions in which this can be done are outlined.