Balancing Hazards in the Design of Local Franchise Contracts

Deanna Malatesta, Craig R. Smith

Research output: Contribution to journalArticle

Abstract

Relying on transaction cost logic, the authors consider the likelihood that contract duration and monitoring are jointly determined in 241 cable franchise renewal agreements. Results indicate that municipalities award longer contracts to larger cable companies with more asset-specific investments, but also more actively monitor these contracts. In addition, performance problems in the initial period lead municipalities to choose more active monitoring going forward. The findings have implications for understanding the way contract options are combined to address various hazards but also for contracting officers who want to make reasoned decisions regarding the use of incentives, controls, rewards, and sanctions.

Original languageEnglish (US)
Pages (from-to)615-641
Number of pages27
JournalUrban Affairs Review
Volume48
Issue number5
DOIs
StatePublished - Sep 1 2012

Keywords

  • cable TV franchising
  • contract design
  • contract hazards
  • contract incentives
  • duration
  • monitoring

ASJC Scopus subject areas

  • Sociology and Political Science
  • Urban Studies

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