Allocating Control in Agency Problems with Limited Liability and Sequential Hidden Actions

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Risk Allocation and the Costs and Benefits of Public-Private Partnerships (2012, background): “…and Yoo (2001), Choi (1993), Macho-Stadler and Perez-Castrillo (1993), Itoh (1994), and Ramakrishnan and Thakor (1991).8 Certainly closer to us is Schmitz (2005) who studies how the control of sequential tasks should be allocated in a pure moral hazard problem but with limited liability as a…”
Public-private partnerships versus traditional procurement: Innovation incentives and information gathering (2013, background): “On the pros and cons of bundling sequential tasks in the absence of information gathering when complete contracts can be written, see also Schmitz (2005) and the literature discussed there.”
To build or not to build: Normative and positive theories of public-private partnerships (2008, background): “Schmitz (2005) investigates a sequential moral hazard model with limited liability as the source of the agency problem, no production externality but with the added twist that the outcome of the first project affects the cost of incentives on the second one.”