We analyze the choice of financial instruments to issue for a firm in a context where informational asymmetries exist in credit relationships. Investors are heterogenous since they do not possess identical firm-specific information. We generalize Boot and Thakor's (1993) approach but depart from...

The high persistence of the PPP deviations is well documented in empirical work about real exchange rates. Our paper explores the possibility that, in presence of e.g. shipping costs, a nonlinear representation is more relevant for the real exchange rate.

This paper investigates the role of probability conditionals in hypothetical reasoning and rational decision making. Its main result is a proof of a representation theorem for preferences defined on sets of sentences (and, in particular, conditional sentences), where an agent's preference for...

If the allocation of a differential information economy are defined as incentive compatible state - contingent lotteries over consumption goods, competitive equilibrium allocations exist and belong to the (ex ante incentive) core. Furthermore, any competitive equilibrium allocation can be viewed...

Using a formal propositional language with operators "individual i assigns probability at least a" for countable many a, we devise an axiom system which is sound and complete with respect to the class of type spaces in the sense of Harsanyi (1967-68). A crucial axiom requires that degrees of...

This paper examines how the first-best models of compensation based on the agents' talents and responsabilities analyzed in some recent contributions can be extended to a second-best context. A few social criteria are proposed and compared to alternative approaches by Roemer and Van de gaer.

Under Cournot and Bertrand cases, cartel stability is investigated in a context of adverse selection, where consumers are imperfectly informed about the products quality. Producers' collusion may be necessary to signal quality via a third-party certification or a price. In particular, cases with...

The paper studies a behavioral learning process where an agent plays, at each period, an action with a probability which is proportional to the cumulative utility he got in the past with that action. The so-called CPR learning rule and the dynamic process it induces are formally stated and...

The author is interested in whether it is worth producing information, th rough surveys, in order to design a quality regulation mechanism when dealing with public services. He studies a principal-agent-users model in which quality is jointly produced by both the agent and the users thanks to...

The paper explores the uniqueness properties of the subjective probabilities in two axiomatizations of state-dependent preferences. Karni, Schmeider and Vind's (KSV) system depends on selecting an arbitrary probability, ans as such, does not guarantee the uniqueness of the derived subjective...