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Optimal contracting with verifiable ex post signals

Kessler, Anke S.; Lülfesmann, Christoph; Schmitz, … - 2000

We study an adverse selection problem in which information that is imperfectly correlated with the agent's type becomes … bad states may be strengthened. Hence, ex post information can reduce efficiency. In contrast, if the agent's utility is ….g., whether the agent is in a "buyer" or "seller" position. In both cases, however, additional information need not improve the …

Persistent link: https://www.econbiz.de/10011538996

Workplace surveillance, privacy protection, and efficiency wages

Schmitz, Patrick W. (contributor) - 2005

Consider an employer who wants her employee to work hard. As is well known from the efficiency wage literature, the employer must pay the (wealth-constrained) employee a positive rent to provide incentives for exerting unobservable effort. Alternatively, the employer could make effort observable...

Persistent link: https://www.econbiz.de/10003126397

Should contractual clauses that forbid renegotiation always be enforced?

Schmitz, Patrick W. (contributor) - 2005

Recent work in the field of mechanism design has led some researchers to propose institutional changes that would permit parties to enter into nonmodifiable contracts, which is not possible under current contract law. This paper demonstrates that it may well be socially desirable not to enforce...

Persistent link: https://www.econbiz.de/10003126403

International protection of intellectual property

Grossman, Gene M.; Lai, Edwin L.-C. - 2002

We study the incentives that governments have to protect intellectual property in a trading world economy. We consider a world economy with ongoing innovation in two countries that differ in market size and in their capacities for innovation. We associate the strength of IPR protection with the...

Persistent link: https://www.econbiz.de/10001726845

Labor Policies and Capital Mobility in Theory and in EMU

Bertola, Giuseppe - 2014

“Race-to-the-bottom” deregulation is to be expected when markets operate across the borders of countries that independently choose and enforce labor policies. Less obviously, in pre-crisis EMU reforms of labor market policies were uneven and related to international imbalances. That pattern...

Persistent link: https://www.econbiz.de/10013048889

Finance, Labour, Capital, and International Integration

Bertola, Giuseppe - 2016

Labour incomes depend on structural as well as politico-economic factors, because labour market policies partially remedy the financial market imperfections that make labour income shocks difficult to insure, and have different implications for labour and capital income. This paper illustrates...

Persistent link: https://www.econbiz.de/10012994277

Task Trade between Similar Countries

Grossman, Gene M.; Rossi-Hansberg, Esteban - 2012

The authors propose a theory of task trade between countries that have similar relative factor endowments and technological capabilities but may differ in size. Firms produce differentiated goods by performing a continuum of tasks, each of which generates local spillovers. Tasks can be performed...

Persistent link: https://www.econbiz.de/10012551314

Income Distribution, Product Quality, and International Trade

Fajgelbaum, Pablo; Grossman, Gene M.; Helpman, Elhanan - 2012

The authors develop a framework for studying trade in horizontally and vertically differentiated products. In their model, consumers with heterogeneous incomes and tastes purchase a homogeneous good and make a discrete choice of quality and variety of a differentiated product. The distribution...

Persistent link: https://www.econbiz.de/10012551341

Balanced Growth Despite Uzawa

Grossman, Gene M. - 2016

Evidence for the United States suggests balanced growth despite falling investment-good prices and less than unitary elasticity of substitution between capital and labor. This is inconsistent with the Uzawa Growth Theorem. We extend Uzawa's theorem to show that introducing human capital...

Persistent link: https://www.econbiz.de/10012996335

Engineering Crises : Favoritism and Strategic Fiscal Indiscipline

Saint-Paul, Gilles - 2017

If people understand that some macroeconomic policies are unsustainable, why would they vote for them in the first place? We develop a political economy theory of the endogenous emergence of fiscal crises, based on the idea that the adjustment mechanism to a crisis favors some social groups,...

Persistent link: https://www.econbiz.de/10012946844