We analyze empirically the allocation of rights and monetary incentives in automobile franchise contracts. These contracts substantially restrict the decision rights of dealers and grant manufacturers extensive contractual completion and enforcement powers, converting the manufacturers, de facto, in a sort of quasi-judiciary instance. Variation in the allocation of decision rights and incentive intensity is explained by the incidence of moral hazard in the relation. In particular, when the cost of dealer moral hazard is higher and the risk of manufacturer opportunism is lower, manufacturers enjoy more discretion in determining the performance required from their dealers and in using mechanisms such as monitoring, termination and monetary incentives to ensure such performance is provided. We also explore the existence of interdependencies between the different elements of the system. and find some complementarities between completion and termination rights, and between monitoring rights and the intensity of incentives.JEL codes: L14, L22, L81, K12 * We thank Oliver Williamson for his advice and support and
Between February 2007 and January 2009, a total of 776 slaughtered animals were examined for the presence of Trematoda in the liver, gall bladder, oesophagus and stomach (rumen and reticulum). Data collected were analysed by the age and breed of the animals. The percentage of cattle from which Trematoda were found was 38 per cent (95 per cent confidence interval [CI] 35 to 41 per cent); 28 per cent (95 per cent CI 25 to 31 per cent) had Fasciola hepatica, 12 per cent (95 per cent CI 10 to 14 per cent) Calicophoron daubneyi and 6 per cent (95 per cent CI 4 to 8 per cent) Dicrocoelium species. A significantly high prevalence of fasciolosis and dicrocoeliosis was observed in cattle over 10 years of age. Autochthonous Rubia Gallega cattle had the highest prevalence of fasciolosis and crossbred cattle had the highest prevalence of dicrocoeliosis (P<0.05). Twenty per cent (95 per cent CI 15 to 25 per cent) of the cattle positive for Fasciola also had Calicophoron species; 10 per cent (95 per cent CI 6 to 14 per cent) also had small liver flukes (Dicrocoelium species).
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