Showing 1 - 10 of 243
This paper studies a principal-agent relation in which the principal's private information about the agent's effort … and not on the public signal. Nonetheless, public information is valuable as it facilitates truthful subjective evaluation …
Persistent link: https://www.econbiz.de/10009752336
? Suppose a manager's evaluation is private information. Justifying her evaluation is costly but limits the principal's scope … attributed to biased managers. I show that these effects occur in optimal contracts without any biased behavior. …
Persistent link: https://www.econbiz.de/10011930440
Subjective evaluations are widely used, but call for different contracts from classical moral-hazard settings. Previous … literature shows that contracts require payments to third parties. I show that the (implicit) assumption of deterministic … contracts makes payments to third parties necessary. This paper studies incentive contracts with stochastic compensation, like …
Persistent link: https://www.econbiz.de/10014458796
This paper presents a novel approach to analyze human decision-making that involves comparing the behavior of professional chess players relative to a computational benchmark of cognitively bounded rationality. This benchmark is constructed using algorithms of modern chess engines and allows...
Persistent link: https://www.econbiz.de/10012499843
-by-move data provide exceptionally detailed and precise information about decision times and decision quality, based on a … acquire information about decision alternatives with uncertain valuations. …
Persistent link: https://www.econbiz.de/10013191595
I show that deterministic dynamic contracts between a principal and an agent are always at least as profitable to the … correlation of stochastic contracts across periods that the usual restriction in the literature to deterministic contracts is …
Persistent link: https://www.econbiz.de/10011901976
Oliver Hart and Bengt Holmström were awarded the 2016 Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel for their fundamental contributions to contract theory. This article offers a short summary and discussion of their path breaking work.
Persistent link: https://www.econbiz.de/10011626725
We consider a general framework of optimal mechanism design under adverse selection and ambiguity about the type distribution of agents. We prove the existence of optimal mechanisms under minimal assumptions on the contract space and prove that centralized contracting implemented via mechanisms...
Persistent link: https://www.econbiz.de/10012237443
-maximal information-gathering. Thus, optimal contracts eliminate private information but not market uncertainty; even though the latter … certifier can enable the seller to disclose her private information publicly, as well as gather additional market information … would be costless, it is suboptimal as it requires excessive information rents to the seller. Thus, market inefficiencies …
Persistent link: https://www.econbiz.de/10015053483
We study how institutional design influences moral transgression. People are heterogeneous in their feelings of guilt and can share guilt with others. Institutions determine the number of supporters necessary for immoral outcomes to occur. With more supporters required, every supporter can share...
Persistent link: https://www.econbiz.de/10009763121