Marian Moszoro
U. C. Berkeley & Kozminski University



(Friday, 23rd May 2014)

Title : Political Contestability, Scrutiny, and Public Contracting

Download the presentation - 3.12 MB

Contrary to the extant literature, we show that higher prices and inefficiencies in the implementation of public contracts compared to pure private contracts result from their specificity and rigidity, which is how public agents limit hazards from interested groups. The main thrust of our research is that, in politically contestable markets, the lack of flexibility in public procurement design and implementation reflects public agents’ political risk adaptation to limit hazards from opportunistic third parties---political opponents, competitors, interest groups---while externalizing the associated adaptation costs to the public at large. Reduced flexibility limits the likelihood of opportunistic challenge lowering third parties’ expected gains and increasing litigation costs. We provide a comprehensible theoretical framework with empirically testable predictions. Further, we apply algorithmic data reading and textual analysis to compare the complexity of public contracts in regulated industries subject to public scrutiny with relational private contracts. Using an original and comprehensive database, we prove that public contracts are larger, feature more arbitration, evaluation, litigation, and termination clauses, and their renegotiation is formalized in amendments with more arbitration clauses. We hypothesize that the higher rigidity of public contracts is a political risk adaptation of public agents by which they lower the likelihood of success of third-party opportunistic challenges. This cutting-edge methodology and proprietary datasets have been conducive to novel empirical results that are extensible to other areas of research.

Bibliographical references :

(a) Third-Party Opportunism and the Nature of Public Contracts
[Theoretical framework with applications; downloadable at: and]

(b) Rigidity of Public Contracts
[A cutting-edge empirical study using algorithmic data reading and word clustering; downloadable at:]



(Monday, 18th May 2015)

Title : Textual Analysis for Hypotheses Testing

Download the presentation - 2.67 MB

Empirical testing has become the touchstone of sound economic theory, especially in the era of big data. In this session, we are going to explore some simple (and not-so-simple) algorithmic data reading techniques that may be applied to create novel datasets from textual documents to test hypotheses in social sciences. Applications include: court decisions, laws and regulations, contracts, codes of conduct, management reports, media news, etc.

Bibliographical references :

Beuve, Jean, Marian Moszoro, and Stéphane Saussier. 2014. Political Contestability and Contract Rigidity: An Analysis of Procurement Contracts. SSRN Library:

Ahern, Kenneth and Denis Sosyura. 2014. Who Writes the News? Corporate Press Releases during Merger Negotiations. Journal of Finance 69, 241-291.

Talley, Eric and Drew O'Kane. 2012. The Measure of a MAC: A Machine-Learning Protocol for Analyzing Force Majeure Clauses in M&A Agreements. Journal of Institutional and Theoretical Economics 168 (1), 181-201.