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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

Optimal procurement of a credence good under limited liability

Bester, Helmut; Yaofu, Ouyang - 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

Motivated beliefs, social preferences, and limited liability in financial decision-making

Ahrens, Steffen; Bosch-Rosa, Ciril - 2022

Using a new experimental design, we compare how subjects form beliefs in an investor-client setup under varying degrees of liability. Our results reflect the importance of social preferences when making investment decisions for others. We show that when investors have no liability, those with...

Persistent link: https://www.econbiz.de/10013435377

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

The welfare economics of moral hazard

Arnott, Richard; Stiglitz, Joseph - 1986

Persistent link: https://www.econbiz.de/10003474097

Portfolio choice and risk

Encarnación, José - 1983

Persistent link: https://www.econbiz.de/10003529028

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

Stochastic contracts and subjective evaluations

Lang, Matthias - 2022

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....

Persistent link: https://www.econbiz.de/10014458796

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

Misappropriation of R&D subsidies : estimating treatment effects with one-sided noncompliance

Boeing, Philipp; Peters, Bettina - 2021

Persistent link: https://www.econbiz.de/10012818352

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