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Persistent link: https://www.econbiz.de/10008735726
In this paper, we focus on the problem created by asymmetric information about the enforcer's (agent's) costs associated to enforcement expenditure. This adverse selection problem affects optimal law enforcement because a low cost enforcer may conceal its information by imitating a high cost...
Persistent link: https://www.econbiz.de/10014173800
conduct and benefit from the club's reputation. I show that if the testing technology is perfect and costless, the choice of …
Persistent link: https://www.econbiz.de/10014203148
We develop a model with asymmetric information, where the uninformed party makes the offer. When parties proceed to trial, their endogenous expenditures partially determine the outcome. The endogenous spending at trial can either strengthen or weaken the bargaining position of the uninformed...
Persistent link: https://www.econbiz.de/10014167140
We examine how the reputation concern of contracting parties affects contractual incentives if information is … revealed to future buyers only if contractual disputes are litigated. We show that the seller's reputation concern acts like an … additional legal cost which induces her to settle privately. A strong reputation concern effectively voids the incentive contract …
Persistent link: https://www.econbiz.de/10013125615
Under asymmetric information, dishonest sellers lead to market unraveling in the lemons model. An additional cost of dishonesty is that language becomes cheap talk. We develop instead a model where people derive utility from actions (what they say), as well as from outcomes, so talk is costly....
Persistent link: https://www.econbiz.de/10013102884
We extend the comparison of experiments in Blackwell (1953) to a strategic setting that both simplifies and expands upon ideas in Gossner (2000). We introduce a partial order on correlating signals, called more strategically informative, and prove that it is equivalent to the partial order more...
Persistent link: https://www.econbiz.de/10013000466
We propose a criterion of stability for two-sided markets with asymmetric information. A central idea is to formulate matching functions, off-path beliefs conditional on counterfactual pairwise deviations, and on-path beliefs in the absence of such deviations. A matching-belief configuration is...
Persistent link: https://www.econbiz.de/10012836811
We study a duopoly where the two price setting firms have symmetric information. The firms produce substitute goods with a state dependent common value. The information that is available to both firms about the unknown state of nature is also available to the consumers, who also have access to...
Persistent link: https://www.econbiz.de/10012985046
How do lenders use their reputation when participating in syndicated loans? I address this question by focusing on … syndicate composition with respect to participants' reputation and its impact on loan spreads. I find that lender reputation … market finance features, rather than bank finance. However I find no evidence that lenders use their reputation and the …
Persistent link: https://www.econbiz.de/10011976949