Governments must usually take policy decisions with an imperfect knowledge of the economic actors' type or the actors' effort level. These issues are addressed within the framework of classic adverse selection or moral hazard models. I discuss in this paper how would the government’s and the...

We provide several generalizations of Mailath's (1987) result that in games of asymmetric information with a continuum of types incentive compatibility plus separation implies differentiability of the informed agent's strategy. The new results extend the theory to classic models in finance such...

This paper deals with endogenous determination of effort as a source of productivity growth.

In credence goods markets, experts have better information about the appropriate quality of treatment than their customers. As experts provide both diagnosis and treatment, this leaves scope for fraud. We experimentally investigate how intensity of price competition and the level of customer...

This paper investigates the impact of four key economic variables on an expert firm’s incentive to defraud its customers in a credence goods market: the level of competition, the expert firm’s financial situation, its competence, and its reputational concerns. We use and complement the...

This paper examines the power of different contractual mechanisms to influence an originator’s choice of costly effort to screen borrowers when the originator plans to securitise its loans. The analysis focuses on three potential mechanisms: the originator holds a “vertical slice”, or...

Lower barriers to entry and developments in world capital markets have increasedthe actual and potential mobility of multinational enterprises. This poses challengesfor host countries' tax policies. The paper examines implications for such policies, formultinantionals' investment decisions and...

Does gender play a role in the context of team work? Our results based on areal-effort experiment suggest that performance depends on the composition of theteam. We find that female and male performance di¤er most in mixed teams withrevenue sharing between the team members, as men put in...

When designing incentives for a manager, the trade-off between insuranceand a “good” allocation of effort across various tasks is oftenidentified with a trade-off between the responsiveness (sensitivity, precision,signal-noise ratio) of the performance measure and its similarity(congruity,...

We analyse a model of two-sided matching and incentive contracts where expertinvestors (venture capitalists) with different monitoring capacities are matched withfirms with different levels of initial wealth. Firms do not have sufficient start-upcapital to cover their project costs and hence,...