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Bank Capital Regulation with an Opportunistic Rating Agency

Efing, Matthias - 2013

This paper models the strategic interaction between a rating agency, a bank and a bank regulator who lacks information … about bank asset risk. The regulator can either (1) make bank capital requirements contingent on credit ratings; or (2) set … constrain high risk bank investment without simultaneously reducing overall investment volume. However, if collusion between the …

Persistent link: https://www.econbiz.de/10013080503

Who Should Pay for Certification?

Stahl, Konrad; Strausz, Roland - 2021

Who does, and who should initiate costly certification by a third party under asymmetric quality information, the buyer or the seller? Our answer - the seller - follows from a nontrivial analysis revealing a clear intuition. Buyer-induced certification acts as an inspection device,...

Persistent link: https://www.econbiz.de/10013316064

Making Sense of Non-Binding Retail-Price Recommendations

Bühler, Stefan - 2010

We model non-binding retail-price recommendations (RPRs) as a communication device facilitating coordination in vertical supply relations. Assuming both repeated vertical trade and asymmetric information about production costs, we show that RPRs may be part of a relational contract,...

Persistent link: https://www.econbiz.de/10013144362

Private Monitoring, Collusion and the Timing of Information

Khalil, Fahad; Lawarrée, Jacques; Scott, Troy Joseph - 2015

When a principal’s monitoring information is private (non-verifiable), the agent should be concerned that the principal could misrepresent the information to reduce the agent’s wage or collect a monetary penalty. Restoring credibility may lead to an extreme waste of resources - the so-called...

Persistent link: https://www.econbiz.de/10014043494

On the Optimal Use of Correlated Information in Contractual Design Under Limited Liability

Danau, Daniel - 2018

Riordan and Sappington (JET, 1988) show that in an agency relationship in which the agent's type is correlated with a public ex post signal, the principal may attain first best (full surplus extraction and efficient output levels) if the agent is faced with a lottery such that each type is...

Persistent link: https://www.econbiz.de/10012917515

Donating Time or Money : Are They Substitutes or Complements?

Hartmann, Bastian - 2012

Decisions to donate time or money for charitable purposes are typically seen as make-or-buy decisions, implying that there should be a clear distinction between individuals engaging in one of these two forms of giving and that this distinction should be somehow linked to opportunity costs. But...

Persistent link: https://www.econbiz.de/10013105136

Information Transmission and Ownership Consolidation in Aid Programs

Dreher, Axel - 2013

example of a “delegation-scheme.” Conversely, project aid represents a more “centralized” type of aid. According to the theory …

Persistent link: https://www.econbiz.de/10013073609

Information Transmission within Federal Fiscal Architectures : Theory and Evidence

Dreher, Axel - 2013

This paper explores the role of information transmission and misaligned interests across levels of government in explaining variation in the degree of decentralization across countries. Within a two-sided incomplete information principal-agent framework, it analyzes two alternative...

Persistent link: https://www.econbiz.de/10013075612

Corporate Taxation and Financial Strategies Under Asymmetric Information

Cohen, Francesco - 2014

In this article we study the corporate tax effects on credit market equilibria. In particular, we develop a model that accounts for five pieces of evidence: i) the existence of a tax incentive to borrow, ii) the negative relationship between leverage and profitability, iii) the existence of...

Persistent link: https://www.econbiz.de/10013053674

Ex Post Information Rents in Sequential Screening

Krahmer, Daniel - 2014

We study ex post information rents in sequential screening models where the agent receives private ex ante and ex post information. The principal has to pay ex post information rents for preventing the agent to coordinate lies about his ex ante and ex post information. When the agent's ex ante...

Persistent link: https://www.econbiz.de/10013054499