Similar Search Results

Inefficiency in a Bilateral Trading Problem with Cooperative Investment

Hori, Kazumi - 2013

A bilateral trading model with investment is considered. In a "cooperative" investment version of the model, the seller …'s investment stochastically determines the buyer's valuation of the good. The value and cost of the good are realized only after … the investment is made, and the investment level and the realization of the good's value and cost are private information …

Persistent link: https://www.econbiz.de/10014195127

On the optimality of privacy in sequential contracting

Calzolari, Giacomo (contributor); … - 2004

This paper considers an environment where two principals sequentially contract with a common agent and studies the exchange of information between the two bilateral relationships. We show that when (a) the upstream principal is not personally interested in the decisions taken by the downstream...

Persistent link: https://www.econbiz.de/10003779206

On the optimality of rivacy in sequential contracting

Calzolari, Giacomo (contributor); … - 2005

This paper studies the exchange of information between two principals who contract sequentially with the same agent, as in the case of a buyer who purchases from multiple sellers. We show that when (a) the upstream principal is not personally interested in the downstream level of trade, (b) the...

Persistent link: https://www.econbiz.de/10003780324

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...

Persistent link: https://www.econbiz.de/10003892452

Binary payment schemes: moral hazard and loss aversion

Herweg, Fabian; Müller, Daniel; Weinschenk, Philipp - 2010

We modify the principal-agent model with moral hazard by assuming that the agent is expectation-based loss averse according to Köszegi and Rabin (2006, 2007). The optimal contract is a binary payment scheme even for a rich performance measure, where standard preferences predict a fully...

Persistent link: https://www.econbiz.de/10008662594

Long-term contracting in a changing world

Pavan, Alessandro - 2007

I study the properties of optimal long-term contracts in an environment in which the agent's type evolves stochastically over time. The model stylizes a buyer-seller relationship but the results apply quite naturally to many contractual situations including regulation and optimal...

Persistent link: https://www.econbiz.de/10008665285

Common agency equilibria with discrete mechanisms and discrete types

Martimort, David; Stole, Lars A. - 2001

This paper characterizes the equilibrium sets of an intrinsic common agencygame with discrete types and direct revelation mechanisms. After presentinga general algorithm to find the pure-strategy equilibria of this game, we use itto characterize these equilibria when the two principals control...

Persistent link: https://www.econbiz.de/10011400396

Optimal contracting under adverse selection : the implications of mentalizing

Lenells, Jonatan; Stea, Diego; Foss, Nicolai J. - In: Contemporary economics 9 (2015) 2, pp. 215-231

We study a model of adverse selection, hard and soft information, and mentalizing ability-the human capacity to represent others' intentions, knowledge, and beliefs. By allowing for a continuous range of different information types, as well as for different means of acquiring information, we...

Persistent link: https://www.econbiz.de/10011305996

Optimal contracting with endogenous project mission

Cassar, Lea - 2014

I present a model in which a principal selects one among many agents to develop a project and influences the agent's ex post level of effort not by outcome-contingent rewards, but by the choice of the project's mission. The closer the project's mission to the agent's preferred mission, the...

Persistent link: https://www.econbiz.de/10010359776

Optimal contracting with endogenous project mission

Cassar, Lea - 2016

I analyze a model in which a principal offers a contract to an agent and can influence the agent’s marginal return of effort by the choice of the project mission. The principal's and the agents' mission preferences are misaligned, and the agents have unobservable intrinsic motivation levels. I...

Persistent link: https://www.econbiz.de/10011561184