This paper studies competitive equilibria in economies characterized by the presence of asymmetric information (both of the moral hazard and the adverse selection type). We consider economies where non-exclusive contracts (securities) with payoffs dependent on the agents' private information are...

This paper develops a dynamic regulatory model wherein the regulator can introduce an entrant into a market characterised by asymmetric information about cost and the outcome of the technological progress. Whe there is passive entry, it is found that the optimal contract has a kink, i.e. it is...

This paper is devoted to the analysis of markets under asymmetric infomation with sellers as the informed party.

This paper formalises a three-tier administrative hierarchy. A benevolent federal government must decide how to fund an indivisible local public work, planned to be undertaken by a single firm. But the federal government observes neither the cost nor the local benefit of the project. To obtain...

The recruitment of new employees is analysed in a theoritical model. It is shown that it can be optimal to implement requirements of formal qualifications for jobs, although it would be possible for the manager to find applicants who have a higher expected ability but no formal qualifications.

In the presence of asymmetric information, the stage at which investment-financing decisions are made is crucial for the composition of international capital flows as well as for the efficiency of channeling savings into investment. This paper compares the implications of two extreme assumptions...

We consider a tax enforcement game in which the fiscal authority cannot pre-commit to an inspection policy and its interaction with the taxpayer is modelled as a signalling game. We extend earlier work by allowing for imperfect auditing, non-linear taxation and non-linear penalties. Using the...

This paper proposes a model of altruism with endogenous labor supply. A full characterization of the family's choices of consumption and leisure is provided. Initially, work effort is assumed to be publicly observed; this assumption is later relaxed, allowing for privately observed actions. It is...

In this paper, the authors use a model of tax competition to study the role of information sharing in common agency problems.

The purpose of this paper is to provide an explanation for relative pricing of futures contracts with respect to underlying stocks using a model incorporating short sales constraints and informational lags between the two markets. In this model stocks and futures are perfect substitutes, except...