The allocation of control rights in a venture does not matter if partners have congruent preferences. This Paper develops a theory of control as a signal of congruence, and applies it to the structure of alliances between a privately informed ‘entrepreneur’ (technology firm) and an...

In a financial economy with asymmetric information and incomplete markets, we study how agents, having no model of how equilibrium prices are determined, may still refine their information by eliminating sequentially ¡°arbitrage state(s)¡±, namely, the state(s) which would grant the agent an...

We study the impact of access regulation in a telecommunications market on an entrant?s decision whether to invest in a network or ask for access when the regulator cannot observe its potential demand. Since the entrant has incentives to not compete vigorously right after entry in order to...

Private debt flows to developing countries surged to record levels over the period 2003-07. A few low-income countries have gained access to the international bond market but the bulk of the flows have continued to go to just a few large middle-income countries. Most low-income countries still...

We propose two generalizations of the Davis Maschler reduced game property to economies with asymmetric information and apply them in the characterization of two solution concepts. One is Wilson's (1978) Coarse Core and the other is a subsolution of it which we call the Coarse+ Core.

In this note I show that there is a mistake in the proof of uniqueness in Engelbrecht-Wiggans, Milgrom and Weber’s seminal “Competitive Bidding and Proprietary Information” and provide a correct proof.

We analyze an economy with asymmetric information and endogenize the possibilities for information transmission between members of a coalition. We then define a concept of the Core that takes into account these communication possibilities. The internal consistency of the improvements is...

This paper presents rigorous and direct tests of two assumptions relating to limited commitment and asymmetric information that current underpin current models of risk pooling. A specially designed economic experiment involving 678 subjects across 23 Zimbabwean villages is used to solve the...

The paper compares tariffs and import quotas when the home firm has private information about its true cost and the government offers incentive contracts to extract this information. We highlight the role of underlying market structure in determining the ranking of the two policy instruments....

This paper provides a survey of recent theories of herding behaviour, bridging two rather distants strands of literature (roughly, American and European). In the first part of the paper the explanation is based on the idea of asymmetric information and principal-agent approach; these could lead...