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We examine a strategic-choice handicap model in which males send costly signals to advertise their quality to females. Females are concerned with the net viability of the male with whom they mate, where net viability is a function of the male's quality and signal. We identify circumstances in...
Persistent link: https://www.econbiz.de/10004968337
We use the theory of abstract convexity to study adverse-selection principal-agent problems and two-sided matching problems, departing from much of the literature by not requiring quasilinear utility. We formulate and characterize a basic underlying implementation duality. We show how this...
Persistent link: https://www.econbiz.de/10011204529
We study markets in which agents first make investments and are then matched into potentially productive partnerships. Equilibrium investments and the equilibrium matching will be efficient if agents can simultaneously negotiate investments and matches, but we focus on markets in which agents...
Persistent link: https://www.econbiz.de/10011031550
We examine the evolutionary foundations of common equilibrium refinement ideas for extensive form games, such as backward and forward induction, by examining the limiting outcome of an evolutionary process driven by stochastic learning and (rare) mutations. We show that the limiting outcome in a...
Persistent link: https://www.econbiz.de/10005028471
This paper presents simple su±cient conditions under which optimal bunches inadverse-selection principal-agent problems can be characterized without using optimal controltheory.
Persistent link: https://www.econbiz.de/10009025022
Persistent link: https://www.econbiz.de/10005316206
This paper derives necessary and sucient conditions for the existence of linear equilibria in the Rochet-Vila model of market making. In contrast to most previous work on the existence of linear equilibria in models of market making, we do not impose independence of the underlying random...
Persistent link: https://www.econbiz.de/10004968334
Contingent ownership structures are prevalent in joint ventures. We offer an explanation based on the investment incentives provided by such an arrangement. We consider a holdup problem in which two parties make relationship-specific investments sequentially to generate a joint surplus in the...
Persistent link: https://www.econbiz.de/10011019487
Persistent link: https://www.econbiz.de/10011019623
In contest models with symmetric valuations, equilibrium payoffs are positiveshares of the value of the prize. In contrast to a bargaining situation, theseshares sum to less than one because a share of the value is lost due to rent-dissipation. We ask: can every such division into payoff shares...
Persistent link: https://www.econbiz.de/10011152755