We study competitive nonlinear pricing in a model involving simultaneously horizontal and vertical product differentiation. It is a particular case of a more general model of optimal contracting with uncertain participation that we study elsewhere (Rochet-Stole (1997))

This paper considers a firm whose potential employees have private information on both their productivity and the extent of their fairness concerns. Fairness is modelled as inequity aversion, where fair-minded workers suffer if their colleagues get more income net of production costs. Screening...

This paper considers a firm whose potential employees have private information on both their productivity and the extent of their fairness concerns. Fairness is modelled as inequity aversion, where fair-minded workers suffer if their colleagues get more income net of production costs. Screening...

This paper extends the standard competitive adverse selection model by allowing for qualitatively different information structures of agents on the informed side of the market. Using the stylized framework of the market for used cars, we examine the welfare properties of equilibria under the...

Many financial markets rely on a discriminatory limit-order book to balance supply and demand. We study these markets in a static model in which uninformed market makers compete in nonlinear tariffs to trade with an informed insider, as in Glosten (1994), Biais, Martimort, and Rochet (2000), and...

This work takes a closer look on the predominant assumption in usual lemon market models of having finitely many or even only two different levels of quality. We model a situation which is close to the classical monopolistic setting but admits an interval of possible quality values....

This paper studies asset markets where buyers of assets do not inherit private information from previous owners and must learn asset quality over time. Imperfect information transmission reduces asymmetric information, but also reduces the trading volume, prices and efficiency. This result is...

Asymmetric information plays an important role in markets and politics. When parties are asymmetrically informed and have misaligned preferences, they may be hurt by adverse selection. By contrast, if parties know that their preferences are aligned, they may benefit from advantageous selection....

We investigate the effects of group identity on hiring decisions with adverse selection problems. We run a laboratory experiment in which employers cannot observe a worker's ability nor verify the veracity of the ability the worker claims to have. We evaluate whether sharing an identity results...

This paper considers a principal-agent model with adverse selection and limited wage discrimination. Under wage compression, an agent may have an incentive to free ride on other agents by manipulating his private information. When collusion among the agents is not possible, the principal...