Preliminary evidence on the appointment of institutional solutions to franchisor moral hazard-the case of franchisee councils
Besides franchisee opportunistic behavior, franchisor moral hazard is a central concern in franchise chains. Economic literature thus far focused on the sharing of franchisee revenues as an incentive for curbing franchisor malfeasance. In this paper, we ask whether and how the obligations of chains...
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| Veröffentlicht in: | Managerial and decision economics 2007-01, Vol.28 (1), p.41-55 |
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| container_title | Managerial and decision economics |
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| creator | Cochet, Olivier Ehrmann, Thomas |
| description | Besides franchisee opportunistic behavior, franchisor moral hazard is a central concern in franchise chains. Economic literature thus far focused on the sharing of franchisee revenues as an incentive for curbing franchisor malfeasance. In this paper, we ask whether and how the obligations of chains may be enforced through institutional arrangements like franchisee councils. Consistent with expectations, the appointment of a council empirically turned out to be more likely as decision rights-a proxy for the scope of moral hazard-were increasingly allocated to companies' management. We found this relationship to be negatively moderated by the contractual share parameter. |
| doi_str_mv | 10.1002/mde.1312 |
| format | Article |
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Decis. Econ</addtitle><date>2007-01</date><risdate>2007</risdate><volume>28</volume><issue>1</issue><spage>41</spage><epage>55</epage><pages>41-55</pages><issn>0143-6570</issn><eissn>1099-1468</eissn><coden>MDECDE</coden><abstract>Besides franchisee opportunistic behavior, franchisor moral hazard is a central concern in franchise chains. Economic literature thus far focused on the sharing of franchisee revenues as an incentive for curbing franchisor malfeasance. In this paper, we ask whether and how the obligations of chains may be enforced through institutional arrangements like franchisee councils. Consistent with expectations, the appointment of a council empirically turned out to be more likely as decision rights-a proxy for the scope of moral hazard-were increasingly allocated to companies' management. 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| identifier | ISSN: 0143-6570 |
| ispartof | Managerial and decision economics, 2007-01, Vol.28 (1), p.41-55 |
| issn | 0143-6570 1099-1468 |
| language | eng |
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| source | RePEc; EBSCOhost Business Source Complete; JSTOR Archive Collection A-Z Listing; Wiley Online Library All Journals |
| subjects | Brands Business structures Collective punishment Contracts Councils Decision making Economic models Empirical evidence Franchise agreements Franchisees Franchises Franchising Industrial organization Institutions Marketing Moral hazard Opportunistic behavior Studies |
| title | Preliminary evidence on the appointment of institutional solutions to franchisor moral hazard-the case of franchisee councils |
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