Principal-agent problems in early trading companies: a tale of two firms

Article Abstract:

Uncertainty causes agents to act in their own self-interests, but their actions are influenced by principals. Principals may have to develop contracts that reduce moral hazard and adverse selection by providing incentives for agents to operate in the best interests of the firm. Both the Hudson's Bay Co and the Royal African Co of 17th-century England used theoretically sound strategies to control for moral hazard, but the Royal African Co was not able to control adverse selection.

History, Contracts, Trading companies, Agency (Law)

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Staggering and synchronization in price-setting: evidence from multiproduct firms

Article Abstract:

Retail store-level multiproduct pricing data are used to investigate price-setting behavior. Across-store staggering and within-store synchronization are observed in the timing of price changes. This confirms the assumption of staggered decisions across price-setters. The results justify the adoption of staggered price-setting mechanisms in analyzing the inflationary process.

Retail Trade, Research, Prices and rates, Retail industry, Pricing

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Price Expectations of Business Firms: Bias in the Short and Long Run

Article Abstract:

Long-run price biases are examined using individual company data over a five-year period. Regulated and large firms make accurate forecasts of their sales prices, but lack accuracy in forecasting the prices of their capital goods purchases.

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