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Dynamic contracts when agent's quality is unknown

Prat, Julien; Jovanovic, Boyan - In: Theoretical economics : TE ; an open access journal in … 9 (2014) 3, pp. 865-914

We solve a long-term contracting problem with symmetric uncertainty about the agent's quality, and a hidden action of the agent. As information about quality accumulates, incentives become easier to provide because the agent has less room to manipulate the principal's beliefs. This result is...

Persistent link: https://www.econbiz.de/10011674079

Contract Litigation as Information Revelation Channel and its Implications on Reputation (Dis)Incentives

Tzang, F.L. Philip - 2011

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

Random inspections and periodic reviews : optimal dynamic monitoring

Varas, Felipe; Marinovic, Iván; Skrzypacz, Andrzej - 2018

reputation for quality, and a principal (e.g. a regulator) can learn the agent's quality via costly inspections. Monitoring plays … two roles: an incentive role, because outcomes of inspections affect agent's reputation, and an informational role because …

Persistent link: https://www.econbiz.de/10011865082

(Bad) reputation in relational contracting

Deb, Rahul; Mitchell, Matthew F.; Pai, Mallesh M. - In: Theoretical economics : TE ; an open access journal in … 17 (2022) 2, pp. 763-800

Motivated by markets for ''expertise,'' we study a bandit model where a principal chooses between a safe and risky arm. A strategic agent controls the risky arm and privately knows whether its type is high or low. Irrespective of type, the agent wants to maximize duration of experimentation with...

Persistent link: https://www.econbiz.de/10013273779

Effects of the menu of loan contracts on borrower behavior

Abraham, Katharine G.; Filiz-Ozbay, Emel; Ozbay, Erkut Y.; … - In: Management science : journal of the Institute for … 68 (2022) 1, pp. 509-528

Persistent link: https://www.econbiz.de/10012821211

Monopolistic screening under learning by doing

Gärtner, Dennis - 2007

This paper investigates the design of incentives in a dynamic adverse selection framework when agents' production technologies display learning effects and agents' rate of learning is private knowledge. In a simple two-period model with full commitment available to the principal, we show that...

Persistent link: https://www.econbiz.de/10010315563

Asset Ownership and Contractability of Interaction

Roider, Andreas - 2002

In a property-rights framework, I study how organizational form and quantity contracts interact in generating investment incentives. The model nests standard property-rights and hold-up models as special cases. I admit general message-dependent contracts, but provide conditions under which...

Persistent link: https://www.econbiz.de/10010263049

Delegation and Information Revelation

Gautier, Axel; Paolini, Dimitri - 2002

This paper addresses the question of delegation in a partial contracting set-up, where only the control over actions is contractible. We consider an organization that should take two decisions, affected by a common state of the world parameter only known by the agent. We show that, if the...

Persistent link: https://www.econbiz.de/10010263055

Flexible life annuities

Direr, Alexis - 2007

Annuity contracts typically deliver a stream of income at a predetermined level in order to insure against the risk of longevity. This paper explores whether flexible annuities, which give subscribers the possibility to choose between different levels for their annuities, may be welfare...

Persistent link: https://www.econbiz.de/10010264232

Regulierung und Wettbewerb im Bereich der Netzinfrastrukturen: Begründung, Regeln und Institutionen

Bickenbach, Frank - 1999

This paper starts by analyzing the consequences that technical and economic charactcristics of network industries have for the relationship between competition and regulation in these industries. A discussion of alternative regulatory rules shows that normative regulatory economics does not...

Persistent link: https://www.econbiz.de/10010265429