The 2008 crash has left all the established economic doctrines - equilibrium models, real business cycles, disequilibria models - in disarray. Part of the problem is due to Smith’s "veil of ignorance": individuals unknowingly pursue society’s interest and, as a result, have no clue as to the macroeconomic effects of their actions: witness the Keynes and Leontief multipliers, the concept of value added, fiat money, Engel’s law and technical progress, to name but a few of the macrofoundations of microeconomics. A good viewpoint to take bearings anew lies in comparing the post-Great Depression institutions with those emerging from Thatcher and Reagan’s economic policies: deregulation, exogenous vs. endoge- nous money, shadow banking vs. Volcker’s Rule. Very simply, the banks, whose lending determined deposits after Roosevelt, and were a public service became private enterprises whose deposits determine lending. These underlay the great moderation preceding 2006, and the subsequent crash.

The Economic Institutions of Capitalism

The Theory of Incentives I: The Principal-Agent Model

Investigating the relationship between communication-conflict interaction and project success among construction project teams

The recent emergence of blockchains may be considered a critical turning point in organizing collaborations. We outline the historical background and the fundamental features of blockchains and pre...

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Blockchain Governance—A New Way of Organizing Collaborations?

Leveraging a longitudinal dataset concerning 102 inter-firm disputes, we evaluate the effects of contract structure on trust and on the likelihood of continued collaboration. We theoretically refine and empirically extend prior research by (a) distinguishing between control and coordination functions of contracts, (b) separating goodwill-based and competence-based trust, and (c) evaluating the effects of contract structure on relational outcomes in the context of disputes. We find that control provisions increase competence-based trust, but reduce goodwill-based trust, resulting in a net decrease in the likelihood of continued collaboration. Coordination provisions increase competence-based trust, leading to an increased likelihood of continued collaboration.

Trust and collaboration in the aftermath of conflict: the effects of contract structure

Uncertainty, opportunistic behavior, and governance in construction projects: The efficacy of contracts

Contractual incentive and trust are two commonly used governance mechanisms that help to promote inter-organizational cooperation. Little is known, however, about the boundary conditions for the complementation of these two governance mechanisms. The aim is to investigate the interaction of contractual incentive and trust in promoting inter-organizational cooperation. A three-staged Stackelberg model was established and then solved by backward induction. Research results indicate that contractual incentive can motivate the contractor’s task behaviours, while the effect of trust on relational behaviours is path-dependent. Three levels of factors (intra-organizational, inter-organizational and project factors) would affect the selection of the optimal incentive coefficient. Moreover, when the changing rate of the client’s cost of effort is less than or equal to a threshold, contractual incentive and trust can be complementary. The study contributes to theory by offering nuanced insights into the governance ...

Promoting cooperation in construction projects: an integrated approach of contractual incentive and trust

Addressing Project Complexity: The Role of Contractual Functions

Building on the multifunctional perspective from current contract theory, we conceptualize contractual complexity as a three-dimensional construct to depict the explicitness and elaborateness of co...

Contractual Complexity in Construction Projects: Conceptualization, Operationalization, and Validation

Construction contracts, such as FIDIC model contracts, are relatively complex and cumbersome, and their composition needs to be better understood. This research uses a multi-functional approach tha...

Wenqian Wang

Papers

Uncertainty, opportunistic behavior, and governance in construction projects: The efficacy of contracts

Promoting cooperation in construction projects: an integrated approach of contractual incentive and trust

Addressing Project Complexity: The Role of Contractual Functions

Contractual Complexity in Construction Projects: Conceptualization, Operationalization, and Validation

Understanding the multiple functions of construction contracts: the anatomy of FIDIC model contracts