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Optimal Interventions in Markets with Adverse Selection

Philippon, Thomas; Skreta, Vasiliki - C.E.P.R. Discussion Papers - 2010

We study interventions to restore efficient lending and investment when financial markets fail because of adverse selection. We solve a design problem where the decision to participate in a program offered by the government can be a signal for private information. We charac terize optimal...

Persistent link: https://www.econbiz.de/10008468692

Public goods and the hold-up problem under asymmetric information

Schmitz, Patrick W - C.E.P.R. Discussion Papers - 2012

An agent can make an observable but non-contractible investment. A principal then offers to collaborate with the agent to provide a public good. Private information of the agent about his valuation may either decrease or increase his investment incentives, depending on whether he learns his type...

Persistent link: https://www.econbiz.de/10011084108

Contractual Execution, Strategic Incompleteness and Venture Capital

Dessí, Roberta - C.E.P.R. Discussion Papers - 2009

Contractual execution generates hard information, available to the contracting parties, even when contracts are secretly executed. Building on this simple observation, the paper shows that incomplete contracts can be preferred to complete contracts. This is because (i) execution of incomplete...

Persistent link: https://www.econbiz.de/10004976792

Venture Capital and Knowledge Transfer

Dessí, Roberta; Yin, Nina - C.E.P.R. Discussion Papers - 2015

transfer, and their implications for investment, innovation, and product market competition. The model also sheds light on the …

Persistent link: https://www.econbiz.de/10011168896

Bonus Culture: Competitive Pay, Screening, and Multitasking

Bénabou, Roland; Tirole, Jean - C.E.P.R. Discussion Papers - 2013

This paper analyzes the impact of labor market competition and skill-biased technical change on the structure of … compensation. The model combines multitasking and screening, embedded into a Hotelling-like framework. Competition for the most … perfect competition, the resulting efficiency loss can be larger than that imposed by a single firm or principal, who distorts …

Persistent link: https://www.econbiz.de/10011083769

Travel Demand Model with Heterogeneous Users and Endogenous Congestion: An application to optimal pricing of bus services

Batarce, Marco; Ivaldi, Marc - C.E.P.R. Discussion Papers - 2011

We formulate and estimate a structural model for travel demand, in which users have heterogeneous preferences and make their transport decisions considering the network congestion. A key component in the model is that users have incomplete information about the preferences of other users in the...

Persistent link: https://www.econbiz.de/10009493565

Contractual solutions to hold-up problems with quality uncertainty and unobservable investments

Schmitz, Patrick W - C.E.P.R. Discussion Papers - 2009

Consider a seller and a buyer who write a contract. After that, the seller produces a good. She can influence the expected quality of the good by making unobservable investments. Only the seller learns the realized quality. Finally, trade can occur. It is always ex post efficient to trade. Yet,...

Persistent link: https://www.econbiz.de/10008458298

Incentives and Tranche Retention in Securitisation: A Screening Model

Fender, Ingo; Mitchell, Janet - C.E.P.R. Discussion Papers - 2009

This paper examines the power of different contractual mechanisms to influence an originator's choice of costly effort to screen borrowers when the originator plans to securitise its loans. The analysis focuses on three potential mechanisms: the originator holds a "vertical slice", or share of...

Persistent link: https://www.econbiz.de/10008459771

Gathering Information before Signing a Contract: Experimental Evidence

Hoppe, Eva I; Schmitz, Patrick W - C.E.P.R. Discussion Papers - 2009

A central insight of agency theory is that when a principal offers a contract to a privately informed agent, the principal trades off ex post efficiency in the bad state of nature against a larger profit in the good state of nature. We report about an experiment with 508 participants designed to...

Persistent link: https://www.econbiz.de/10005789080

CEO Compensation and Strategy Inertia

Inderst, Roman; Mueller, Holger M - C.E.P.R. Discussion Papers - 2006

This paper considers the joint optimal design of CEOs' on-the-job compensation and severance pay in a general optimal contracting framework. We obtain a novel argument for high-powered, non-linear CEO compensation such as bonus schemes and option grants that is different from existing arguments...

Persistent link: https://www.econbiz.de/10005791544

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