Contract specificity and its performance outcomes

Governance theories, such as transaction cost economics, argue that systematic deviations from an attribute–governance alignment should influence performance. This article investigates the performance implications of contract specificity for the procurement of information technology products. The authors argue that parties choose a level of contract specificity that economizes on both the ex ante contracting costs and the ex post transaction costs and that deviations between the observed and the predicted levels of contract specificity are an important determinant of these transaction costs. The authors test the hypotheses using a comprehensive archival data set of information technology transactions and employ a two-step estimation procedure. First, they estimate the “predicted” level of contract specificity, which accounts for key transactional attributes. Second, they study the consequences of deviating from this predicted level of contractual specificity. The results provide the first explicit demonstration of the trade-off between ex ante contracting costs and ex post transaction problems and suggest that parties need to economize jointly on these costs when choosing the governance form

Ergodic control of multidimensional diffusions I: the existence results

The existence of optimal stable Markov relaxed controls for the ergodic control of multidimensional diffusions is established by direct probabilistic methods based on a characterization of a.s. limit sets of empirical measures. The optimality of the above is established in the strong (i.e., almost sure) sense among all admissible controls under very general conditions

Stochastic differential games with multiple modes

We have studied two person stochastic differential games with multiple modes. For the zero-sum game we have established the existence of optimal strategies for both players. For the non zerosum case we have proved the existence of a Nash equilibrium