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We investigate a team setting in which workers have different degrees of commitment to the outcome of their work. We show that if there are complementarities in production and if the team manager has some information about team members, interventions that the manager undertakes in order to...
Persistent link: https://www.econbiz.de/10005504583
The paper studies managerial compensation schemes for suituations, where the current management knows more about the company's expected profitability than the new employee. When a manager is offered a contract with only a low fixed salary but high profit participation, he will be afraid that the...
Persistent link: https://www.econbiz.de/10005518784
A class of employment contracts entailing production targets and consequent rewards is studied. In a nondiscriminatory environment, a principal hiring many agents faces the problem of writing a common contract which induces the highest possible effort from each one of his agents. While a very...
Persistent link: https://www.econbiz.de/10005370985
We present a common value mechanism design model for an informed principal where only the principal has private information, but her one-dimensional private information is allowed to be distributed according to any probability measure. For this model we characterize the set of pure-strategy...
Persistent link: https://www.econbiz.de/10004968466
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...
Persistent link: https://www.econbiz.de/10011166363
In a class of informed principal problems with common values, we define iteratively a particular allocation which we call the assured allocation. It is comparatively easy to calculate and straightforward to interpret. It always exists, is unique and continuous in the priors. It is undominated,...
Persistent link: https://www.econbiz.de/10011263581
This paper considers general games in which multiple informed principals simultaneously compete to influence the decisions of a common agent. It shows that we can characterize all outcomes of any game in which principals delegate the final decisions to the agent using arbitrary mechanisms, by...
Persistent link: https://www.econbiz.de/10011263583
<Para ID="Par1">We introduce a “nestedness” relation for a general class of sender–receiver games and compare equilibrium properties, in particular the amount of information transmitted, across games that are nested. Roughly, game <InlineEquation ID="IEq1"> <EquationSource Format="TEX">$$B$$</EquationSource> <EquationSource Format="MATHML"> <math xmlns:xlink="http://www.w3.org/1999/xlink"> <mi>B</mi> </math> </EquationSource> </InlineEquation> is nested in game <InlineEquation ID="IEq2"> <EquationSource Format="TEX">$$A$$</EquationSource> <EquationSource Format="MATHML"> <math xmlns:xlink="http://www.w3.org/1999/xlink"> <mi>A</mi> </math> </EquationSource> </InlineEquation> if the players’ optimal...</equationsource></equationsource></inlineequation></equationsource></equationsource></inlineequation></para>
Persistent link: https://www.econbiz.de/10011240828
Persistent link: https://www.econbiz.de/10010826353
We show that, in environments with independent private values and transferable utility, a privately informed principal can solve her mechanism selection problem by implementing an allocation that is ex-ante optimal for her. No type of the principal can gain from proposing an alternative...
Persistent link: https://www.econbiz.de/10010986689