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Horner, Johannes; Samuelson, Larry - Cowles Foundation for Research in Economics, Yale University - 2015

We study a discrete-time model of repeated moral hazard without commitment. In every period, a principal finances a … the returns of a successful project unbeknownst the principal. The absence of commitment is reflected both in the solution … period to the next. We show that removing commitment from the equilibrium concept is relatively innocuous -- if the players …

Persistent link: https://www.econbiz.de/10011170126

Relational Contracts with Subjective Peer Evaluations

Deb, Joyee; Li, Jin; Mukherjee, Arijit - Cowles Foundation for Research in Economics, Yale University - 2015

We study optimal contracting in a setting where a firm repeatedly interacts with multiple workers, and can compensate them based on publicly available performance signals as well as privately reported peer evaluations. If the evaluation and the effort provision are done by different workers (as...

Persistent link: https://www.econbiz.de/10011210467

Mechanism Design with Limited Information: The Case of Nonlinear Pricing

Bergemann, Dirk; Shen, Ji; Xu, Yun; Yeh, Edmund M. - Cowles Foundation for Research in Economics, Yale University - 2010

We analyze the canonical nonlinear pricing model with limited information. A seller offers a menu with a finite number of choices to a continuum of buyers with a continuum of possible valuations. By revealing an underlying connection to quantization theory, we derive the optimal finite menu for...

Persistent link: https://www.econbiz.de/10008752834

The Implementation Duality

Noldeke, Georg; Samuelson, Larry - Cowles Foundation for Research in Economics, Yale University - 2015

We use the theory of abstract convexity to study adverse-selection principal-agent problems and two-sided matching problems, departing from much of the literature by not requiring quasilinear utility. We formulate and characterize a basic underlying implementation duality. We show how this...

Persistent link: https://www.econbiz.de/10011201348

Optimally Empty Promises and Endogenous Supervision

Miller, David A.; Rozen, Kareen - Cowles Foundation for Research in Economics, Yale University - 2011

We study optimal contracting in team settings, featuring stylized aspects of production environments with complex tasks. Agents have many opportunities to shirk, task-level monitoring is needed to provide useful incentives, and because it is difficult to write individual performance into formal...

Persistent link: https://www.econbiz.de/10009321766

Stochastic Search Equilibrium

Moscarini, Giuseppe; Postel-Vinay, Fabien - Cowles Foundation for Research in Economics, Yale University - 2010

We analyze a stochastic equilibrium contract-posting model. Firms post employment contracts, wages contingent on all payoff-relevant states. Aggregate productivity is subject to persistent shocks. Both employed and unemployed workers search randomly for these contracts, and are free to quit at...

Persistent link: https://www.econbiz.de/10008594239

Breach, Remedies and Dispute Settlement in Trade Agreements

Maggi, Giovanni; Staiger, Robert W. - Cowles Foundation for Research in Economics, Yale University - 2009

We provide a simple but novel model of trade agreements that highlights the role of transaction costs, renegotiation and dispute settlement. The model allows us to characterize the appropriate remedy for breach and whether the agreement should be structured as a system of "property rights" or...

Persistent link: https://www.econbiz.de/10008577752

Gaming and Strategic Opacity in Incentive Provision

Ederer, Florian; Holden, Richard; Meyer, Margaret - Cowles Foundation for Research in Economics, Yale University - 2014

It is often suggested that incentive schemes under moral hazard can be gamed by an agent with superior knowledge of the environment, and that deliberate lack of transparency about the incentive scheme can reduce gaming. We formally investigate these arguments in a two-task moral hazard model in...

Persistent link: https://www.econbiz.de/10010895687

Relational Contracting, Repeated Negotiations, and Hold-Up

Kranz, Sebastian - Cowles Foundation for Research in Economics, Yale University - 2013

We propose a unified framework to study relational contracting and hold-up problems in infinite horizon stochastic games. We first illustrate that with respect to long run decisions, the common formulation of relational contracts as Pareto-optimal public perfect equilibria is in stark contrast...

Persistent link: https://www.econbiz.de/10010607540

Prizes versus Wages with Envy and Pride

Dubey, Pradeep K.; Geanakoplos, John; Haimanko, Ori - Cowles Foundation for Research in Economics, Yale University - 2005

We show that if agents are risk neutral, prizes outperform wages when there is sufficient pride and envy relative to the noisiness of performance. If agents are risk averse, prizes are a necessary supplement to wages (as bonuses).

Persistent link: https://www.econbiz.de/10005762713

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