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Horner, Johannes; Samuelson, Larry - Cowles Foundation for Research in Economics, Yale University - 2015

We study a discrete-time model of repeated moral hazard without commitment. In every period, a principal finances a … the returns of a successful project unbeknownst the principal. The absence of commitment is reflected both in the solution … period to the next. We show that removing commitment from the equilibrium concept is relatively innocuous -- if the players …

Persistent link: https://www.econbiz.de/10011170126

Default and Punishment in General Equilibrium

Dubey, Pradeep; Geanakoplos, John; Shubik, Martin - Cowles Foundation for Research in Economics, Yale University - 2001

We extend the standard model of general equilibrium with incomplete markets to allow for default and punishment. The equilibrating variables include expected delivery rates, along with the usual prices of assets and commodities. By reinterpreting the variables, our model encompasses a broad...

Persistent link: https://www.econbiz.de/10005087374

Catalytic Finance: When Does It Work?

Morris, Stephen; Shin, Hyun Song - Cowles Foundation for Research in Economics, Yale University - 2003

In a simple model of currency crises caused by creditor coordination failure, we show that bailouts that reduce ex post inefficiency will sometimes create ex ante moral hazard but will sometimes enhance the incentives for governments to take preventative actions. This model helps us understand a...

Persistent link: https://www.econbiz.de/10005087386

Signalling and Default: Rothschild-Stiglitz Reconsidered

Dubey, Pradeep; Geanakoplos, John - Cowles Foundation for Research in Economics, Yale University - 2001

In our previous paper we built a general equilibrium model of default and punishment in which equilibrium always exists and endogenously determines asset promises, penalties, and sales constraints. In this paper we interpret the endogenous sales constraints as equilibrium signals. By...

Persistent link: https://www.econbiz.de/10005463898

Default and Punishment in General Equilibrium

Dubey, Pradeep; Geanakoplos, John; Shubik, Martin - Cowles Foundation for Research in Economics, Yale University - 2001

We extend the standard model of general equilibrium with incomplete markets to allow for default and punishment by thinking of assets as pools. The equilibrating variables include expected delivery rates, along with the usual prices of assets and commodities. By reinterpreting the variables, our...

Persistent link: https://www.econbiz.de/10005463908

Soft Budgets and Renegotiations in Public-Private Partnerships

Engel, Eduardo; Fischer, Ronald; Galetovic, Alexander - Cowles Foundation for Research in Economics, Yale University - 2009

Public-private partnerships (PPPs) are increasingly used to provide infrastructure services. Even though PPPs have the potential to increase efficiency and improve resource allocation, contract renegotiations have been pervasive. We show that existing accounting standards allow governments to...

Persistent link: https://www.econbiz.de/10004963476

The Basic Public Finance of Public-Private Partnerships

Engel, Eduardo; Fischer, Ronald; Galetovic, Alexander - Cowles Foundation for Research in Economics, Yale University - 2007

Public-private partnerships (PPPs) have been justified because they release public funds or save on distortionary taxes. However, the resources saved by a government that does not finance the upfront investment are offset by giving up future revenue flows to the concessionaire. If a PPP can be...

Persistent link: https://www.econbiz.de/10005762742

Renegotiation without Holdup: Anticipating Spending and Infrastructure Concessions

Engel, Eduardo; Fischer, Ronald; Galetovic, Alexander - Cowles Foundation for Research in Economics, Yale University - 2006

Infrastructure concessions are frequently renegotiated after investments are sunk, resulting in better contractual terms for the franchise holders. This paper offers a political economy explanation for renegotiations that occur with no apparent holdup. We argue that they are used by political...

Persistent link: https://www.econbiz.de/10005093963

Health Reform, Health Insurance, and Selection: Estimating Selection into Health Insurance Using the Massachusetts Health Reform

Hackmann, Martin B.; Kolstad, Jonathan T.; Kowalski, … - Cowles Foundation for Research in Economics, Yale University - 2012

We implement an empirical test for selection into health insurance using changes in coverage induced by the introduction of mandated health insurance in Massachusetts. Our test examines changes in the cost of the newly insured relative to those who were insured prior to the reform. We find that...

Persistent link: https://www.econbiz.de/10009398247

Adverse Selection and an Individual Mandate: When Theory Meets Practice

Hackmann, Martin B.; Kolstad, Jonathan T.; Kowalski, … - Cowles Foundation for Research in Economics, Yale University - 2013

We develop a model of selection that incorporates a key element of recent health reforms: an individual mandate. We identify a set of key parameters for welfare analysis, allowing us to model the welfare impact of the actual policy as well as to estimate the socially optimal penalty level. Using...

Persistent link: https://www.econbiz.de/10011189001

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