We conduct a two-stage game analysis. The first phase is the contract negotiation phase and the second phase is the effort-making phase after signing the contract. We show that the two parties can attain a Pareto optimal utility level by bargaining a simple linear risk-sharing contract in the contract negotiation phase based on the equilibrium effort levels in the effort-making phase.
Financial support from the Airport Environment Improvement Foundations, Kansai International Airport Co., Ltd., Narita International Airport Co., Ltd. Japan Airport Terminal Co., Ltd., and JSPS KAKENHI Grant Number 16K03695 are gracefully acknowledged.
Hihara, K. and Makimoto, N. (2018), "Analyses of Risk-sharing Contract of Airport and Airline Vertical Relationship: Bargaining and Agency Analyses", Airline Economics in Asia (Advances in Airline Economics, Vol. 7), Emerald Publishing Limited, pp. 267-286. https://doi.org/10.1108/S2212-160920180000007014Download as .RIS
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