A model is presented of a uniform price auction where bidders compete in demand schedules; the model allows for common and private values in the absence of exogenous noise. It is shown how private information yields more market power than the levels seen with full information. Results obtained...

I show that cutting the flow of information between a principal and an agent can increase the power of the incentives of the agent to reveal private information. (JEL: D23, D82, D86, L20) (c) 2010 by the European Economic Association.

This paper reports the results of experiments designed to test the theory of the optimal composition of prizes in contests. In the aggregate the behavior of subjects is consistent with that predicted by the theory, but we find that such aggregate results mask an unexpected compositional effect...

We characterize optimal incentive contracts in a moral hazard framework extended in two directions. First, after effort provision, the agent is free to leave and pursue some ex-post outside option. Second, the value of this outside option is increasing in effort, and hence endogenous. Optimal...

This paper presents an incomplete information game of pricing and targeted advertising with vertically differentiated product. Firms have incomplete information about production costs and can inform consumers about price and product characteristics by either using the mass media, which reaches...

This paper focuses on testing providers' moral hazard caused by a health care report card policy. We argue that, to indicate providers' moral hazard, empirical approaches should be based on understanding that the policy may cause different sides of participants to take actions. Neglecting this,...

Microfinance institutions serve a majority of female borrowers. But do men and women benefit from same credit conditions? This paper investigates this issue by presenting an original model and testing its predictions on an exceptional database including 34,000 loan applications from a Brazilian...

Most of the contributions to the optimal tax-enforcement literature assume that audits are perfect and always discover evaders. However, evasion often remains undetected. To reduce the probability of such a failure, governments invest resources to improve their tax administrations’ detection...

The existing literature in expert-customer relationship concludes that when: i) consumers are homogenous, ii) consumers are committed with an an expert once this one made a recommendation, and iii) the type of treatment provided is verifiable, an expert finds optimal to serve efficiently his...

We study the design of randomized controlled experiments in environments where outcomes are significantly affected by unobserved effort decisions taken by the subjects (agents). While standard randomized controlled trials (RCTs) are internally consistent, the unobservability of effort provision...