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Blockchains-based smart contracts are disrupting the smart real estate sector of the smart cities. The current study explores the literature focused on blockchain smart contracts in smart real estate and proposes a conceptual framework for its adoption in smart cities. Based on a systematic review method, the literature published between 2000 and 2020 is explored and analyzed. From the literature, ten key aspects of the blockchain smart contracts are highlighted that are grouped into six layers for adopting the smart contracts in smart real estate. The decentralized application and its interactions with Ethereum Virtual Machine (EVM) are presented to show the development of a smart contract that can be used for blockchain smart contracts in real estate. Further, a detailed design and interaction mechanism are highlighted for the real estate owners and users as parties to a smart contract. A list of functions for initiating, creating, modifying, or terminating a smart contract is presented along with a stepwise procedure for establishing and terminating smart contracts. The current study can help the users enjoy a more immersive, user-friendly, and visualized contracting process, whereas the owners, property technologies (Proptech) companies, and real estate agents can enjoy more business and sales. This can help disrupt traditional real estate and transform it into smart real estate in line with industry 4.0 requirements.

In this paper, we show that stable outcomes exist in matching environments with complementarities, such as social media platforms or markets for patent licenses. Our results apply to both nontransferable and transferable utility settings, and allow for multilateral agreements and those with externalities. In particular, we show that stable outcomes in these settings are characterized by the largest fixed point of a monotone operator, and so can be found using an algorithm; in the nontransferable utility case, this is a one-sided deferred acceptance algorithm, rather than a Gale–Shapley algorithm. We also give a monotone comparative statics result as well as a comparative static on the effect of bundling contracts together. These illustrate the impact of design decisions, such as increased privacy protections on social media, or the use of antitrust law to disallow patent pools, on stable outcomes.

Continued innovation in contract design may enhance the delivery of agri-environmental climate public goods (AECPG), but barriers to adoption arise in terms of how farmers perceive the economic benefits. Therefore, this paper examines survey data from Ireland and the Netherlands to analyse whether land managers agree that results-based, collective action, value chain and land tenure contracts for the delivery of AECPG are understandable, applicable to their farm and economically beneficial. Using Probit models, we also identify groups of land managers who perceive the different contract types as being economically beneficial, and these findings can inform policymakers of farmer groups who need adequate consideration during the design of agri-environmental contracts. For example, greater incentives could encourage older farmers to enrol in results-based contracts in Ireland and value chain contracts in the Netherlands. We also find a link between contract duration and the perceived economic benefits of collective action contracts in both countries, with land managers in Ireland desiring a longer duration. We highlight that policymakers and land managers in Ireland could apply lessons from the design of agri-environmental contracts in the Netherlands, where they are more common and varied. Greater knowledge exchange between users and non-users of such contracts would also help bridge the gap between theory and practice in both countries.

Research and development (R&D) collaborations, common in high-tech industries, are challenging to manage because of technical and market risks as well as incentive problems. We investigate how control rights, options, payment terms, and timing allow the innovator to capture maximum value from its R&D collaborations with a marketer. Our study reveals a counterintuitive result; the innovator may, under certain conditions, prefer to grant launch control rights or buyout options to the marketer despite the fact that both terms restrict its downstream actions. We demonstrate that a menu of contracts is not necessary to address the adverse selection problem because the menu can be replicated by a single option contract. We show that timing, through renegotiation or delayed contracting, as well as the careful allocation of control rights and options can have a significant influence on the value of collaborative R&D. We provide recommendations on the optimal contract structure and timing based on two project characteristics, novelty of the R&D process and market-potential variability. This paper was accepted by David Hsu, entrepreneurship and innovation .

The Medicare Shared Savings Program (MSSP) was created under the Patient Protection and Affordable Care Act to incentive providers to reduce costs while maintaining quality of care. In this paper, the authors propose a predictive analytics approach to redesigning the MSSP contract with the goal of better aligning incentives and improving financial outcomes from the MSSP. The authors leverage a data set containing the financial performance of providers enrolled in the MSSP, which together accounts for 7 million beneficiaries and more than $70 billion in Medicare spending. It is estimated that introducing performance-based subsidies to the MSSP can boost Medicare savings by up to 40% without compromising provider participation in the MSSP. This work highlights the promise that data analytics hold in the design of incentive contracts. The Medicare Shared Savings Program (MSSP) was created under the Patient Protection and Affordable Care Act to control escalating Medicare spending by incentivizing providers to deliver healthcare more efficiently. Medicare providers that enroll in the MSSP earn bonus payments for reducing spending to below a risk-adjusted financial benchmark that depends on the provider’s historical spending. To generate savings, a provider must invest to improve efficiency, which is a cost that is absorbed entirely by the provider under the current contract. This has proven to be challenging for the MSSP, with a majority of participating providers unable to generate savings owing to the associated costs. In this paper, we propose a predictive analytics approach to redesigning the MSSP contract with the goal of better aligning incentives and improving financial outcomes from the MSSP. We formulate the MSSP as a principal–agent model and propose an alternate contract that includes a performance-based subsidy to partially reimburse the provider’s investment. We prove the existence of a subsidy-based contract that dominates the current MSSP contract by producing a strictly higher expected payoff for both Medicare and the provider. We then propose an estimator based on inverse optimization for estimating the parameters of our model. We use a data set containing the financial performance of providers enrolled in the MSSP, which together accounts for 7 million beneficiaries and more than $70 billion in Medicare spending. We estimate that introducing performance-based subsidies to the MSSP can boost Medicare savings by up to 40% without compromising provider participation in the MSSP. We also find that the subsidy-based contract performs well in comparison with a fully flexible nonparametric contract.

Software development outsourcing (SDO) contracts are plagued with ex post opportunism and underinvestment problems. Property rights theory (PRT) argues that appropriate property rights allocation between vendors and clients can reduce opportunism and incentivize relation-specific investments. We conduct an in-depth content analysis of 171 real SDO contracts and empirically examine how project attributes and contract parties’ bargaining power affect the allocation of intellectual property rights (IPR). We find that clients retained more IPR when software development was modularized whereas they shared more IPR with vendors in contracts that incorporated greater use of a vendor’s proprietary software. Greater levels of task complexity were associated with more IPR sharing with vendors. We also find that the responsiveness of IPR to project attributes varied across the different types of intellectual assets. For example, vendors were more likely to obtain redeployment rights of know-how if they were contracted for novel software development projects. However, clients were less likely to cede ownership of data and confidential information embedded in software customization projects. We control for a variety of firm and transaction characteristics and the results we obtain here are robust to concerns of endogeneity bias.

This paper presents new evidence on the role of embeddedness in predicting contract duration in the context of information technology outsourcing. Contract duration is a strategic decision that aligns interests of clients and vendors, providing the benefits of business continuity to clients and incentives to undertake relationship specific investments for vendors. Considering the salience of this phenomenon, there has been limited empirical scrutiny of how contract duration is awarded. We posit that clients and vendors obtain two benefits from being embedded in an interorganizational network. First, the learning and experience accumulated from being embedded in a client-vendor network could mitigate the challenges in managing longer term contracts. Second, the network serves as a reputation system that can stratify vendors according to their trustworthiness and reliability, which is important in longer term arrangements. In particular, we attempt to make a substantive contribution to the literature by theorizing about embeddedness at four distinct levels: structural embeddedness at the node level, relational embeddedness at the dyad level, contractual embeddedness at the level of a neighborhood of contracts, and finally, positional embeddedness at the level of the entire network. We analyze a data set of 22,039 outsourcing contracts implemented between 1989 and 2008. We find that contract duration is indeed associated with structural and positional embeddedness of participant firms, with the relational embeddedness of the buyer-seller dyad, and with the duration of other contracts to which it is connected through common firms. Given the nature of our data, identification using traditional ordinary least squares based approaches is difficult given the unobserved errors clustered along two nonnested dimensions and the autocorrelation in a firm’s decision (here the contract) with those of contracts in its reference group. We use a multiway cluster robust estimation and a network auto-regressive estimation to address these issues. Implications for literature and practice are discussed.

We develop a model based on asymmetric information (adverse selection) that provides a rational explanation for the persistent use of royalties alongside equity in university technology transfer. The model shows how royalties, through their value-destroying distortions, can act as a screening tool that allows a less-informed principal, such as the university’s Technology Transfer Office (TTO), to elicit private information from the more informed spin-off. We also show that equity–royalty contracts outperform fixed-fee–royalty contracts because they cause fewer value-destroying distortions. Furthermore, we show that our main result is robust to problems of moral hazard. Beside the coexistence result, the model also offers explanations for the empirical findings that equity generates higher returns than royalty and that TTOs willing to take equity in lieu of fixed fees are more successful in creating spin-offs. This paper was accepted by David Hsu, entrepreneurship and innovation.

This study considers a retailer’s optimal endogenous demand information acquisition format decision in a dual-channel supply chain setting. Two information acquisition formats are examined, depending on whether the outcome of information acquisition is observable to the manufacturer. We explicitly characterize the manufacturer’s optimal contract provision under each acquisition format, and derive the retailer’s optimal endogenous information acquisition format choice. Two underlying driving forces for the retailer’s preference for the observable acquisition are derived. On one hand, observable acquisition makes the retailer lose some informational advantage, which is detrimental to the retailer. On the other hand, observable acquisition may alleviate the ordering quantity distortions, which is beneficial to the retailer. In equilibrium, we show that the retailer with an inferior acquisition capability might be pleased to choose observable acquisition when the market dispersion is in the middle range. Although the manufacturer consistently obtains more profit under observable acquisition, the supply chain may still prefer unobservable acquisition because the observability of information acquisition may aggravate double marginalization under certain conditions. Moreover, the introduction of the direct sales channel may dampen the retailer’s incentive to choose the observable acquisition format.