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Efficiency, welfare, and political competition
Bierbrauer, Felix; Boyer, Pierre C. - 2014
We study political competition in an environment in which voters have private information about their preferences. Our …
Persistent link: https://www.econbiz.de/10010358277
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Lying in competitive environments : a clean identification of behavioral impacts
Dato, Simon; Feess, Eberhard; Nieken, Petra - 2022
competition, and/or the behavioral impacts of competition. Psychologically, a competitive environment alters incentives for ….e., succeeding in a competition is valuable per se. We design an experiment that allows us to disentangle financial and psychological …
Persistent link: https://www.econbiz.de/10013288029
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Market power and welfare in asymmetric divisible good auctions
Manzano Tovar, Carolina; Vives, Xavier - 2016
We analyze a divisible good uniform-price auction that features two groups each with a finite number of identical bidders. Equilibrium is unique, and the relative market power of a group increases with the precision of its private information but declines with its transaction costs. In line with...
Persistent link: https://www.econbiz.de/10011580637
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Do managers with limited liability take more risky decisions? : an information acquisition model
Malcomson, James M. - 2010
Risk-neutral individuals take more risky decisions when they have limited liability. Risk-neutral managers may not when acting as agents under contract and taking costly actions to acquire information before taking decisions. Limited liability makes it optimal to increase the reward for outcomes...
Persistent link: https://www.econbiz.de/10003937594
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Relational incentive contracts with persistent private information
Malcomson, James M. - 2015 - This version: July 24, 2015
This paper investigates relational incentive contracts with continuous, privately-observed agent types that are persistent over time. With fixed agent types, full separation is not possible when continuation equilibrium payoffs following revelation are on the Pareto frontier of attainable...
Persistent link: https://www.econbiz.de/10011300994
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Private monitoring, collusion and the timing of information
Khalil, Fahad; Lawarrée, Jacques; Scott, Troy J. - 2013
When the information used by a principal to monitor an agent is private, and thus non-verifiable by a third party, the principal has a credibility issue with the agent. The agent should be concerned that the principal could misrepresent the information in order to collect a monetary penalty from...
Persistent link: https://www.econbiz.de/10010212662
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Signaling versus costly information acquisition
Bester, Helmut; Lang, Matthias; Li, Jianpei - 2018
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 between...
Persistent link: https://www.econbiz.de/10011888619
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Selling dreams : endogenous optimism in lending markets
Bridet, Luc; Schwardmann, Peter - 2020
We propose a simple model of borrower optimism in competitive lending markets with asymmetric information. Borrowers in our model engage in self-deception to arrive at a belief that optimally trades off the anticipatory utility benefits and material costs of optimism. Lenders' contract design...
Persistent link: https://www.econbiz.de/10012213062
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Do Zombies rise when interest rates fall? : a relationship banking model
Herweg, Fabian; Kähny, Maximilian - 2022
An entrepreneur chooses a relationship bank or market finance. The advantage of bank finance is that the quality of the … that the bank continues inefficient projects, i.e., zombie lending occurs. In the short run - for a given contract - a drop … in the market interest rate increases zombification. The bank adapts the contract to this drop in the long run, and …
Persistent link: https://www.econbiz.de/10013041381
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Softening competition by enhancing entry : an example from the banking industry
Bouckaert, Jan; Degryse, Hans - 2002
We show that competing firms relax overall competition by lowering future barriers to entry. We illustrate our findings …-period profits. This dampens competition for serving the first-period market. …
Persistent link: https://www.econbiz.de/10011541031