We consider a general adverse selection model as an optimal control problem with mixed constraints. We prove that under broad conditions the optimal contract exists and is continuous.

On November 14th, 2014, SUERF – The European Money and Finance Forum – and CNMV, Comisión Nacional del Mercado de Valores – the Spanish Authority for supervision of securities markets – jointly organized a conference in Madrid: Challenges in Securities Markets Regulation: Investor...

At least since Akerlof (1970), asymmetric information in the case of experience goods has been a central issue in the economic literature. This paper studies regulation in markets where the quality of the experience good is never completely verifiable by consumers even after purchase. In the...

It is common for a majority of people to rank themselves as better than average on simple tasks and worse than average on dificult tasks. The literature takes for granted that this apparent miscon?dence is problematic. We argue, however, that this behaviour is consistent with purely rational...

We investigate the consequences of imperfect data privacy on information acquisition of personal health data. In a game of persuasion with ex-ante symmetric information players decide on whether or not to acquire and reveal information about their personal health status to convince a decision...

This article analyses information asymmetry in conceptual terms. It presents one characterization of the asymmetric information concept, described more by a socio-economic vision of it and its relationship with the digital economy. It also frames asymmetry of information as a public good versus...

Many disasters are foreshadowed by insuficient preventive care. In this paper, we argue that there is a true problem of prevention, in that insu¢ cient care is often the result of rational calculations on the part of agents. We identify two factors that lead to dubious e¤orts in care. First,...

Purpose–The purpose of this paper is to theoretically and empirically explore the effects of attention levels on individual investors' investment return. Design/methodology/approach–By introducing the heterogeneous attention, the authors first expand the theoretical model of Barber and...

Using a large database built from the credit files of UniCredit we focus on loans to small businesses at the peak of the crisis. We study the determinants of the worsening of financial tension up to March 2009 for those customers experiencing (or close to) financial tension already at the end of...

This paper tests the robustness of the "two-tiered market" in which efficient bilateral contracts emerge between firms and workers (Brown, Falk and Fehr, 2004). Our experiment introduces stochastic interruptions in firms' ability to offer contracts. Involuntarily laid off workers are eager to be...