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Moral hazard and bargaining over incentive contracts

Dittrich, Marcus; Städter, Silvio - 2014

This paper analyses bargaining over an incentive compatible contract in a moral hazard framework. We introduce the Kalai-Smorodinsky bargaining solution and compare the outcome with the commonly applied Nash solution. Whether worker's effort is higher in the Nash or the Kalai-Smorodinsky...

Persistent link: https://www.econbiz.de/10010388771

General equilibrium with contracts

Kwon, Suehyun - 2016

This paper studies general equilibrium when workers in the economy are also consumers of final goods. Once a firm and a worker are matched, there is a standard moral hazard problem. However, the firm's profit depends on the price of the good the worker produces, and the price is determined by...

Persistent link: https://www.econbiz.de/10011580675

How to share it out : the value of information in teams

Gershkov, Alex; Li, Jianpei; Schweinzer, Paul - 2014

We study the role of information exchange, leadership and coordination in team or partnership structures. For this … purpose, we view individuals jointly engaging in productive processes-a "team"-as endowed with individual and privately held … information on the joint production process. Once individual information is shared, team members decide individually on the effort …

Persistent link: https://www.econbiz.de/10010405163

A monetary equilibrium with the lender of last resort

Matsuoka, Tarishi; Watanabe, Makoto - 2023

This paper studies the role of a lender of last resort (LLR) in a monetary model where a shortage of a bank's monetary reserves (a liquidity crisis) occurs endogenously. We show that discount window lending by the LLR is welfare-improving but reduces banks' ex-ante incentive to hold monetary...

Persistent link: https://www.econbiz.de/10014283905

Contracts and Inequity aversion

Englmaier, Florian; Wambach, Achim - 2002

Using the concept of Inequity Aversion we derive in a Moral Hazard setting several results which differ from conventional contract theory. Our three key insights are: First, inequity aversion plays a crucial role in the design of optimal contracts. Second, there is a strong tendency towards...

Persistent link: https://www.econbiz.de/10011514018

Moral hazard in electoral teams

Cox, Gary W.; Fiva, Jon H.; Smith, Daniel M.; … - 2020

How do parties motivate candidates to exert effort in closed-list elections? If each candidate’s primary goal is winning a seat, then those in safe and hopeless list positions have weak incentives to campaign. We present a model in which (i) candidates care about both legislative seats and the...

Persistent link: https://www.econbiz.de/10012229272

Bargaining with intertemporal maximin payoffs

Martinet, Vincent; Gajardo, Pedro; De Lara, Michel - 2019

We frame sustainability problems as bargaining problems among stakeholders who have to agree on a common development path. For infinite alternatives, the set of feasible payoffs is unknown, limiting the possibility to apply classical bargaining theory and mechanisms. We define a framework...

Persistent link: https://www.econbiz.de/10011962323

The tragedy of annuitization

Heijdra, Ben J.; Mierau, Jochen O.; Reijnders, Laurie S. M. - 2010

We construct a tractable discrete-time overlapping generations model of a closed economy and use it to study government redistribution of accidental bequests and private annuities in general equilibrium. Individuals face longevity risk as there is a positive probability of passing away before...

Persistent link: https://www.econbiz.de/10003994548

Optimal stabilization policy with flexible prices

Berentsen, Aleksander (contributor); … - 2005

We construct a dynamic stochastic general equilibrium model to study optimal monetary stabilization policy. Prices are fully flexible and money is essential for trade. Our main result is that if the central bank pursues a long-run price path, thereby controlling inflation expectations, it can...

Persistent link: https://www.econbiz.de/10003300933

Peer effects and social preferences in voluntary cooperation

Christian, Thöni; Gaechter, Simon - 2014

Social preferences and social influence effects ("peer effects") are well documented, but little is known about how peers shape social preferences. Settings where social preferences matter are often situations where peer effects are likely too. In a gift-exchange experiment with independent...

Persistent link: https://www.econbiz.de/10010340306

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