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The Dynamics of Seller Reputation : Theory and Evidence from eBay
Cabral, Luis - 2004
We propose a basic theoretical model of eBay's reputation mechanism, derive a series of implications and empirically test their validity. Our theoretical model features both adverse selection and moral hazard. We show that when a seller receives a negative rating for the first time his...
Persistent link: https://www.econbiz.de/10012468330
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How Artificial Intelligence and Machine Learning Can Impact Market Design
Milgrom, Paul R. - 2018
In complex environments, it is challenging to learn enough about the underlying characteristics of transactions so as to design the best institutions to efficiently generate gains from trade. In recent years, Artificial Intelligence has emerged as an important tool that allows market designers...
Persistent link: https://www.econbiz.de/10012453432
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The Bidder Exclusion Effect
Coey, Dominic - 2014
We introduce a simple and robust approach to answering two key questions in empirical auction analysis: discriminating … between models of entry and quantifying the revenue gains from improving auction design. The approach builds on Bulow and … and auction formats without requiring instruments or estimation of a complex structural model. We demonstrate the approach …
Persistent link: https://www.econbiz.de/10012458142
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Flow Trading
Budish, Eric B.; Cramton, Peter C.; Kyle, Albert S.; … - National Bureau of Economic Research - 2023
We introduce and analyze a new market design for trading financial assets. The design allows traders to directly trade any user-defined linear combination of assets. Orders for such portfolios are expressed as downward-sloping piecewise-linear demand curves with quantities as flows...
Persistent link: https://www.econbiz.de/10014250116
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The Bail-In Problem : Systematic Goals, Ad Hoc Means
Eichengreen, Barry - 2000
In this paper we analyze the recent efforts of the international financial institutions to limit the moral hazard created by their assistance to crisis countries. We question the wisdom of the case-by-case approach taken in Pakistan, Ecuador, Romania and Ukraine. We show that because default and...
Persistent link: https://www.econbiz.de/10012471114
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Causes of the Korean Financial Crisis : Lessons for Policy
Hahm, Joon-Ho - 2000
This paper uses an asymmetric information framework to understand the causes of the recent financial crisis in Korea. It shows that the Korean data is consistent with this explanation of the crisis. It then draws on this analysis to discuss several lessons that can help guide Korean policymakers...
Persistent link: https://www.econbiz.de/10012471293
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Job Destruction and the Experiences of Displaced Workers
Haan, Wouter J. den - 1999
This paper evaluates a class of endogenous job destruction models based on how well they explain the observed experiences of displaced workers. We show that pure reallocation models in which relationship-specific productivity drifts downward over time are difficult to reconcile with the evidence...
Persistent link: https://www.econbiz.de/10012471571
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The Anatomy of Health Insurance
Cutler, David M. - 1999
This article describes the anatomy of health insurance. It begins by considering the optimal design of health insurance policies. Such policies must make tradeoffs appropriately between risk sharing on the one hand and agency problems such as moral hazard (the incentive of people to seek more...
Persistent link: https://www.econbiz.de/10012471611
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Economics and Mental Health
Frank, Richard G. - 1999
This paper is concerned with the economics of mental health. We argue that mental health economics is like health economics only more so: uncertainty and variation in treatments are greater; the assumption of patient self-interested behavior is more dubious; response to financial incentives such...
Persistent link: https://www.econbiz.de/10012471749
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Reserve Requirements on Sovereign Debt in the Presence of Moral Hazard -- on Debtors or Creditors?
Aizenman, Joshua - 1999
This paper characterizes the effects of reserve requirements on financial loans in the presence of moral hazard on the lender side (i.e., the anticipation that the taxpayer will bailout lending banks if large default will occur) and sovereign risk on the borrower side. The impacts of such...
Persistent link: https://www.econbiz.de/10012471796