Showing 1 - 9 of 9
Individuals use narratives as rationales or justifications to make their claims more convincing. I provide a general framework for partial verifiability based on narratives. Narratives give many reasons and arguments. The receiver derives the message's meaning by aggregating these reasons; her...
Persistent link: https://www.econbiz.de/10012824823
Promises are prevalent in many competitive environments, but promise keeping is often difficult to observe. Do promises still offer an opportunity to honor future obligations, if promise keeping is unobservable? Focusing on campaign promises, we study the value of transparency. We showhow...
Persistent link: https://www.econbiz.de/10012830361
Subjective evaluations are widely used, but call for different contracts from traditional moral-hazard settings. Previous literature shows that contracts require payments to third parties, which real-world contracts rarely use. I show that the implicit assumption of deterministic contracts makes...
Persistent link: https://www.econbiz.de/10013311715
Consider legal uncertainty as uncertainty about the legality of a specific action. In particular, suppose that the threshold of legality is uncertain. I show that this legal uncertainty raises welfare. Legal uncertainty changes deterrence in opposite directions. The probability of conviction...
Persistent link: https://www.econbiz.de/10011584863
In Spence’s (1973) signaling by education model and in many of its extensions, firms can only infer workers’ productivities from their education choices. In reality, firms also use sophisticated pre–employment auditing to learn workers’ productivities. We characterize the trade–offs...
Persistent link: https://www.econbiz.de/10011931933
Promises are prevalent in many competitive environments, but promise keeping is often difficult to observe. Do promises still offer an opportunity to honor future obligations, if promise keeping is unobservable? Focusing on campaign promises, we study the value of transparency. We show how...
Persistent link: https://www.econbiz.de/10012269436
Individuals use narratives as rationales or justifications to make their claims more convincing. I provide a general framework for partial verifiability based on narratives. Narratives give many reasons and arguments. The receiver derives the message’s meaning by aggregating these reasons; her...
Persistent link: https://www.econbiz.de/10012269572
Subjective evaluations are widely used, but call for different contracts from traditional moral-hazard settings. Previous literature shows that contracts require payments to third parties, which real-world contracts rarely use. I show that the implicit assumption of deterministic contracts makes...
Persistent link: https://www.econbiz.de/10012799758
Should principals explain and justify their evaluations? Suppose the principal's evaluation is private information, but she can provide justification by sending a costly cheap-talk message. If she does not provide justification, her message space is restricted, but the message is costless. I...
Persistent link: https://www.econbiz.de/10010398669