This paper addresses the question of delegation in an organisation where there is an initial asymmetry of information between the principal and the agent. We assume that the principal cannot use revelation techniques à la Baron Myerson to elicit agent's superior information and in contrast, we...

The Clean Development Mechanism (CDM) offers abatement cost savings under the Kyoto Protocol by allowing credits for emission reductions obtained in signatory developing countries. The paper shows that it is necessary to include technology transfers in the CDM to obtain correct incentives for...

The paper models the combined use of taxation and voluntary agreements when there is asymmetric information between the regulator and industry on the firms' actual emissions. The model incorporates the following features: 1) the regulator does not know the firm's special production...

The purpose of this paper is to compare the effect of different domestic climate policy instruments under asymmetric information when the regulator wants to secure the survival of a specific firm. It is a well-known result from economic theory that emission taxes lead to a cost-effective...

Credence goods are characterized by informational asymmetries between sellers and consumers that invite fraudulent behavior by sellers. This paper presents the results of a natural field experiment on taxi rides in Athens, Greece, set up to measure different types of fraud and to examine the...

We examine the influence of guilt and trust on the performance of credence goods markets. An expert can make a promise to a consumer first, whereupon the consumer can express her trust by paying an interaction price before the expert's provision and charging decisions. We argue that the expert's...

In markets for credence goods sellers are better informed than their customers about the quality that yields the highest surplus from trade. This paper studies second-degree price-discrimination in such markets. It shows that discrimination regards the amount of advice offered to customers and...

Empirical literature on moral hazard focuses exclusively on the direct impact of asymmetric information on market outcomes, thus ignoring possible repercussions. We present a field experiment in which we consider a phenomenon that we call second-degree moral hazard - the tendency of the supply...