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Risk Sharing and Subcontracting

  • Günter Bamberg

Summary

Linear risk sharing provisions between companies and supply industry are considered. The provisions are characterized by target profit, target cost, and a sharing rate. The problem to assess these parameters appropriately is dealt with in a normative model. The model is parsimoniously parameterized and allows explicit solutions with respect to all contractual parameters. The simplicity of the model makes it possible to incorporate additional aspects such as diversification, heterogeneous expectations or cost monitoring expenditure.

Keywords

Actual Cost Optimal Effort Certainty Equivalent Optimal Contract Competitive Bidding 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

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Copyright information

© Springer-Verlag Berlin · Heidelberg 1987

Authors and Affiliations

  • Günter Bamberg

There are no affiliations available

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