We consider exchange economies with a continuum of agents and differential information about finitely many states of nature. It was proved in Einy, Moreno, and Shitovitz (2001) that if we allow for free disposal in the market clearing (feasibility) constraints then an irre- ducible economy has...

We show that in a standard symmetric Cournot duopoly with unknown demand, the optimal information disclosure policy of an informed benevolent planner is to fully inform one of the duopolists and disclose no information to the other one. We discuss possible extensions of the result.

This article models a situation in which a monopolistic insurer evaluates risk better than its customers. The resulting equilibrium allocations are compared to the consequences of the standard adverse selection hypothesis. On the positive side, they exhibit the property that low-risk people are...

A principal needs a worker for the production of a good. The worker can be hired as an internal agent, or an external agent under a contract. These two organizational modes correspond to in-house production and outsourcing, respectively. In each case, the agent earns experience benefits: future...

In this paper, we extend Aumann’s (Ann Stat 4:1236–1239, 1976) probabilistic agreement theorem to situations in which agents’ prior beliefs are represented by a common neo-additive capacity. In particular, we characterize the family of updating rules for neo-additive capacities, which are...

We study information transmission between informed experts and an uninformed decision-maker who only takes binary decisions. In the single expert case, we show that information transmission can only be relatively poor. Hence, even sophiscated communication games do not yield equilibria which (ex...

This paper presents a theory for Islamic venture capital namely ‘Mudharabah’ contract under adverse selection problem. In order to avoid selecting a low type entrepreneur for a given good project, the framework defines the profit sharing ratio (PSR) as a screening device. We then develop a...