The paper studies insurance with moral hazard in a system of contingent-claims markets. Insurance buyers are modelled as Cournot monopolists or oligopolists. The other agents condition their expectations on market prices, as in models of rational-expectations equilibrium with asymmetric...

The paper develops an integrated model of optimal nonlinear income taxation, public-goods provision and pricing in a large economy. With asymmetric information about labour productivities and publicgoods preferences, the multidimensional mechanism design problem becomes tractable by requiring...

Kolmogorov's extension theorem provides a natural mapping from the space of coherent hierarchies of an agent's first-order, second- order, etc. beliefs to the space of probability measures over the exogenous parameters and the other agents' belief hierarchies. Mertens and Zamir (1985) showed...

Der Text beruht auf einer am 9. Mai 2017 vor dem Bundesverfassungsgericht abgegebenen Stellungnahme in der mündlichen Verhandlung zu einem Verfahren über den Umfang der Verpflichtung der Bundesregierung zur Information des Parlaments (Az. 2BvE 2/11). Das Gericht hatte um Auskünfte zur...

The paper discusses criteria for comparing risk aversion of decision makers when outcomes are multidimensional. A weak concept, commodity specific greater risk aversion , is based on the comparison of risk premia paid in a specified commodity. A stronger concept, uniformly greater risk aversion...

We analyze shareholders' incentives to change the leverage of a firm that has already borrowed substantially. As a result of debt overhang, shareholders have incentives to resist reductions in leverage that make the remaining debt safer. This resistance is present even without any government...