Narrow search
Showing 1 - 10 of 243
Cover Image
Subjective evaluation versus public information
Bester, Helmut; Münster, Johannes - 2013
This paper studies a principal-agent relation in which the principal's private information about the agent's effort choice is more accurate than a noisy public performance measure. For some contingencies the optimal contract has to specify ex post inefficiencies in the form of inefficient...
Persistent link: https://www.econbiz.de/10009752336
Cover Image
Credence goods, costly diagnosis, and subjective evaluation
Bester, Helmut; Dahm, Matthias - 2014
We study contracting between a consumer and an expert. The expert can invest in diagnosis to obtain a noisy signal about whether a low-cost service is sufficient or whether a high-cost treatment is required to solve the consumerś problem. This involves moral hazard because diagnosis effort and...
Persistent link: https://www.econbiz.de/10010429934
Cover Image
Optimal procurement of a credence good under limited liability
Bester, Helmut; Ouyang, Yaofu - 2017
This paper analyzes the optimal contract for a consumer to procure a credence good from an expert when (i) the expert might misrepresent his private information about the consumer’s need, (ii) the expert might not choose the requested service since his choice of treatment is non-observable,...
Persistent link: https://www.econbiz.de/10011781931
Cover Image
Deterministic versus stochastic contracts in a dynamic principal-agent model
Mettral, Thomas - 2018
I show that deterministic dynamic contracts between a principal and an agent are always at least as profitable to the principal as stochastic ones, if the so-called first-order approach in dynamic mechanism design is satisfied. The principal commits, while the agent's type evolution follows a...
Persistent link: https://www.econbiz.de/10011901976
Cover Image
Can a bonus overcome moral hazard? : an experiment on voluntary payments, competition, and reputation in markets for expert services
Angelova, Vera; Regner, Tobias - 2017
Interactions between players with private information and opposed interests are often prone to bad advice and inefficient outcomes, e.g. markets for financial or health care services. In a deception game we investigate experimentally which factors could improve advice quality. Besides advisor...
Persistent link: https://www.econbiz.de/10011697162
Cover Image
A theory of crowdfunding : a mechanism design approach with demand uncertainty and moral hazard
Strausz, Roland - 2017
Crowdfunding provides innovation in enabling entrepreneurs to contract with consumers before investment. Under aggregate demand uncertainty, this improves screening for valuable projects. Entrepreneurial moral hazard and private cost information threatens this benefit. Crowdfunding’s...
Persistent link: https://www.econbiz.de/10011590906
Cover Image
Signalling rivalry and quality uncertainty in a duopoly
Bester, Helmut; Demuth, Juri - 2011
This paper considers a market in which only the incumbent's quality is publicly known. The entrant's quality is observed by the incumbent and some fraction of informed consumers. This leads to price signalling rivalry between the duopolists, because the incumbent gains and the entrant loses when...
Persistent link: https://www.econbiz.de/10009404774
Cover Image
Politically induced regulatory risk and independent regulatory agencies
Strausz, Roland - 2017
Uncertainty in election outcomes generates politically induced regulatory risk. For monopoly regulation, political … parties' risk attitudes towards such risk depend on a fluctuation effect that hurts both parties and an output …-expansion effect that benefits at least one party. Irrespective of the parties' risk attitudes, political parties have incentives to …
Persistent link: https://www.econbiz.de/10011705495
Cover Image
Uncertain product availability in search markets
Atayev, Atabek - 2021
In many markets buyers are poorly informed about which firms sell the product (product availability) and prices, and therefore have to spend time to obtain this information. In contrast, sellers typically have a better idea about which rivals offer the product. Information asymmetry between...
Persistent link: https://www.econbiz.de/10012671887
Cover Image
Behavioral implementation without unanimity
Korpela, Ville; Lombardi, Michele; Zachariassen, Julius - 2024
Behavioral implementation studies implementation when agents' choices need not be rational. All existing papers of this literature, however, fail to handle a large class of choice behaviors because they rely on a well-known condition called Unanimity. This condition says, roughly speaking, that...
Persistent link: https://www.econbiz.de/10014551784