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Stahl, Konrad; Strausz, Roland - 2011

Who does, and who should initiate costly certification by a third party under asymmetric quality information, the buyer or the seller? Our answer - the seller - follows from a nontrivial analysis revealing a clear intuition. Buyer-induced certification acts as an inspection device,...

Persistent link: https://www.econbiz.de/10010306003

Price Competition with Information Disparities in a Vertically Differentiated Duopoly

Cavaliere, Alberto - 2004

differentiation, informed consumers exert a positive externality on the purchasers of the high quality good as its price decreases … when the share of informed consumers decreases. Considering also that the price of the low quality good increases with the … with pessimistic consumers we can explain demand collapses and insensitivity to price changes due to consumer suspicions …

Persistent link: https://www.econbiz.de/10011324907

Heterogeneous Multiple Bank Financing Under Uncertainty: Does it Reduce Inefficient Credit Decisions?

Bannier, Christina E. - 2005

Small and medium-sized firms typically obtain capital via bank financing. They often rely on a mixture of relationship and arm's-length banking. This paper explores the reasons for the dominance of heterogeneous multiple banking systems. We show that the incidence of inefficient credit...

Persistent link: https://www.econbiz.de/10010316088

Incentives and the Core of an exchange economy: A survey

Forges, Françoise; Minelli, Enrico; Vohra, Rajiv - 2000

of non-emptiness of the core as well as core convergence to price equilibrium allocations. …

Persistent link: https://www.econbiz.de/10010318870

Regulation under Financial Constraints

Gautier, Axel - 2002

This article studies the problem of regulating a monopolist with unknown marginal cost. The originality of the paper is to consider that the regulator faces a cash-in-advance constraint. The introduction of such a constraint not only reduces the amount of public good provided but also limits the...

Persistent link: https://www.econbiz.de/10010263052

Delegation and Information Revelation

Gautier, Axel; Paolini, Dimitri - 2002

This paper addresses the question of delegation in a partial contracting set-up, where only the control over actions is contractible. We consider an organization that should take two decisions, affected by a common state of the world parameter only known by the agent. We show that, if the...

Persistent link: https://www.econbiz.de/10010263055

Uncertain bequest needs and long-term Insurance contracts

Fei, Wenan; Fluet, Claude; Schlesinger, Harris - 2008

We examine how long-term life insurance contracts can be designed to incorporate uncertain future bequest needs. An individual who buys a life insurance contract early in life is often uncertain about the future financial needs of his or her family, in the event of an untimely death. Ideally,...

Persistent link: https://www.econbiz.de/10010264521

Imperfect Certification

Gu, Yiquan - 2008

This paper proposes a model for a certification market with an imperfect testing technology. Such a technology only assures that whenever two products are tested the higher quality product is more likely to pass than the lower quality one. When only one certifier with such testing technology is...

Persistent link: https://www.econbiz.de/10010264746

Performance pay, sorting, and outsourcing

Henneberger, Fred; Sousa-Poza, Alfonso; Ziegler, Alexandre - 2007

Implementing performance pay requires that workers' output be measured. When measurement costs differ among firms, those with a measurement cost advantage choose to implement performance pay. They attract the best workers, and both the level and variability of compensation are higher at these...

Persistent link: https://www.econbiz.de/10010268459

In Vino Veritas: The Economics of Drinking

Heufer, Jan - 2009

It is argued that drug consumption, most commonly alcohol drinking, can be a technology to give up some control over one's actions and words. It can be employed by trustworthy players to reveal their type. Similarly alcohol can function as a social lubricant and faciliate type revelation in...

Persistent link: https://www.econbiz.de/10010271394