We investigate the terms of exchange between the legislative branch of the government and an administrative bureau with standard operating procedures. An administrative bureau is a not-for-profit public organisation responsible for the production of a non-marketable good. Such a bureau is...

Earmarking is a form of bundling in which government adopts a tax policy while specifying the uses of the revenue. This paper explores how bundling can enhance efficiency: it can inform the public of the quality of a program proposed, or of the quality of the agency that will be responsible for...

We examine how diversification of projects assigned to an agency can enhance efficiency by informing a principal of the agency’s quality. Projects that appear inefficient in isolation may be justified when assigned to the same agency. Assigning different tasks to different special purpose...

This paper examines a game-theoretical model of parimutuel betting markets with asymmetric information. Generically, all Bayesian-Nash equilibria of the simultaneous game are characterized depending on the number of bettors and the quality of their private information. An equilibrium where all...

This paper analyzes incentives for polluting firms to exchange abatement cost information under the non-linear pollution tax scheme (‘differential tax’) introduced by Kim and Chang [J. Regul. Econom. 5, 1993, 193-197]. It shows that polluting firms have - under mild conditions - an incentive...

Under contingent fees the attorney gets a share of the judgement; under conditional fees the lawyer gets an upscale premium if the case is won which is, however, unrelated to the adjudicated amount. We compare conditional and contingent fees in a framework where lawyers are uninformed about the...

We consider resource allocation within an organisation when agents have a preference for autonomy and show how delegation bears on moral hazard and adverse selection. Agents may care about autonomy for reasons of job-satisfaction, status or greater reputation of perform-ance under autonomy....

Health care providers are almost always universally reimbursed by third party purchasers. As a result, health care purchasers are faced with risk selection challenges. In response, risk adjustment methods are introduced in the reimbursement for services. However, health care providers under this...

This paper studies the effect of asymmetric information on equilibrium stability in a class of linear models where the actual state depends on the forecasts about it. Stability is deffined by the so-called eductive criterion which relies on common knowledge of rationality. The main result is...