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Working papers

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Working papers


Franchisors’ choice between royalties and fixed fees evidence from Brazil

Eugênio José Silva Bitti, Cintya Lanchimba, Muriel Fadairo, Working paper GATE 2017-31
In franchise contracts, the royalty rate and the fixed entrance fee are the main monetary clauses defining the payment scheme between the franchisor and the franchisee. In the traditional agency view, the presence of distant outlets leads the franchisor to choose a payment mechanism designed to provide incentives to the franchisee ; that is, a low royalty rate associated with a high fixed fee. Based on a unique panel dataset, we provide evidence that, in the Brazilian context, spatial dispersion has the opposite impact, with interesting practical and research implications.

Regulation and altruism

Izabela Jelovac, Samuel Kembou Nzale, Working paper GATE 2017-30
We study optimal contracts in a regulator-agent setting with joint production, altruistic and selfish agents, and uneasy outcome measurement. Such a setting represents sectors of activities such as education and health care provision. The agents and the regulator jointly produce an outcome for which they all care to some extent that is varying from agent to agent. Some agents, the altruistic ones, care more than the regulator does while others, the selfish agents, care less. Moral hazard is present due to the agent’s effort that is not contractible. Adverse selection is present too since the regulator cannot a priori distinguish between altruistic and selfish agents. Contracts consist of a simple transfer from the regulator to the agents together with the regulator’s input in the joint production. We show that a screening contract is not optimal when we face both moral hazard and adverse selection.

How voters use grade scales in evaluative voting

Antoinette Baujard, Frédéric Gavrel, Herrade Igersheim, Jean-François Laslier, Isabelle Lebon, Working paper GATE 2017-29
During the first round of the 2012 French presidential election, participants in an in situ experiment were invited to vote according to “evaluative voting”, which involves rating the candidates using a numerical scale. Various scales were used : (0,1), (-1,0,1), (0,1,2), and (0,1,...,20). The paper studies scale calibration effects, i.e., how individual voters adapt to the scale, leading to possibly different election outcomes. The data show that scales are not linearly equivalent, even if individual ordinal preferences are not inconsistent. Scale matters, notably because of the symbolic power of negative grades, which does not affect all candidates uniformly.