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Mechanism design and intentions
Bierbrauer, Felix; Netzer, Nick - Institut für Volkswirtschaftslehre, … - 2012
We introduce intention-based social preferences into a mechanism design framework with independent private values and quasilinear payoffs. For the case where the designer has no information about the intensity of social preferences, we provide conditions under which mechanisms which have been...
Persistent link: https://www.econbiz.de/10010817273
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Reference points in renegotiations: The role of contracts and competition
Schmidt, Klaus M.; Bartling, Björn - Institut für Volkswirtschaftslehre, … - 2012
Several recent papers argue that contracts provide reference points that affect ex post behavior. We test this … effect of contracts on bargaining threatpoints. We compare situations in which an initial contract is renegotiated to …
Persistent link: https://www.econbiz.de/10010604136
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How do informal agreements and renegotiation shape contractual reference points?
Fehr, Ernst; Hart, Oliver; Zehnder, Christian - Institut für Volkswirtschaftslehre, … - 2011
Previous experimental work provides encouraging support for some of the central assumptions underlying Hart and Moore (2008)’s theory of contractual reference points. However, existing studies ignore realistic aspects of trading relationships such as informal agreements and ex post...
Persistent link: https://www.econbiz.de/10009358972
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Optimal design and p-concavity
Ewerhart, Christian - Institut für Volkswirtschaftslehre, … - 2009
Some of the most beautiful results in mechanism design depend crucially on Myerson?s (1981) regularity condition. E.g., the second-price auction with reserve price is revenue maximizing only if the type distribution is regular. This paper offers two main results. First, an interpretation of...
Persistent link: https://www.econbiz.de/10004988914
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Optimal grading
Zubrickas, Robertas - Institut für Volkswirtschaftslehre, … - 2010
Assuming that teachers are concerned with human capital formation and students - with ability signaling, in this paper we model a teacher-student relationship as an agency problem with conflicting interests. In our model, the teacher elicits effort from the student rewarding for it with a grade,...
Persistent link: https://www.econbiz.de/10008465168
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Bilateral trade with loss-averse agents
Benkert, Jean-Michel - Institut für Volkswirtschaftslehre, … - 2015
We study the bilateral trade problem put forward by Myerson and Satterthwaite (1983) under the assumption that agents are loss-averse. We use the model developed by Kőszegi and Rabin (2006, 2007) to find optimal mechanisms for the minimal subsidy, revenue maximization and welfare maximization...
Persistent link: https://www.econbiz.de/10011203011
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Competitive Markets without Commitment
Netzer, Nick; Scheuer, Florian - Institut für Volkswirtschaftslehre, … - 2008
In the presence of a time-inconsistency problem with optimal agency contracts, we show that competitive markets … their contracts and agents can switch firms. As long as the ex-post market outcome satisfies a weak notion of … properties. In addition, we show that equilibrium contracts without commitment are identical to those with full commitment if the …
Persistent link: https://www.econbiz.de/10005756642
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On reputation: A microfoundation of contract enforcement and price rigidity
Fehr, Ernst; Brown, Martin; Zehnder, Christian - Institut für Volkswirtschaftslehre, … - 2008
We study the impact of reputational incentives in markets characterized by moral hazard problems. Social preferences have been shown to enhance contract enforcement in these markets, while at the same time generating considerable wage and price rigidity. Reputation powerfully amplifies the...
Persistent link: https://www.econbiz.de/10005627891
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More Order with Less Law: On Contract Enforcement, Trust, and Crowding
Bohnet, Iris; Frey, Bruno S.; Huck, Steffen - Institut für Volkswirtschaftslehre, …
Most contracts, whether between voters and politicians or between house owners and contractors, are incomplete. "More …
Persistent link: https://www.econbiz.de/10005585611
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Psychological Foundations of Incentives
Fehr, Ernst; Falk, Armin - Institut für Volkswirtschaftslehre, …
During the last two decades economists have made much progress in understanding incentives, contracts and organisations …
Persistent link: https://www.econbiz.de/10005627964