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Anderlini, Luca - 2008

We identify and investigate the basic 'hold-up problem' which arises whenever each party to a contract has to pay some ex-ante cost for the contract to become feasible. We then proceed to show that, under plausible circumstances, a 'contractual solution' to this hold-up problem is not available....

Persistent link: https://www.econbiz.de/10012771158

Foundations of Incomplete Contracts

Hart, Oliver - 2008

In the last few years, a new area has emerged in economic theory, which goes under the heading of 'incomplete … contracting'. However, almost since its inception, the theory has been under attack for its lack of rigorous foundations. In this … paper we evaluate some of the criticisms that have been made of the theory, in particular, those in Maskin and Tirole (1998a …

Persistent link: https://www.econbiz.de/10012771159

Imperfect Capital Markets and Persistence of Initial Wealth Inequalities

Piketty, Thomas - 2008

We consider an infinite-horizon inter-generational economy with identical agents differing only in their inherited wealth and with a constant-returns-to-scale technology using capital and labour (called quot;effortquot;) and displaying a purely idiosyncratic risk. If effort is contractible, full...

Persistent link: https://www.econbiz.de/10012771117

Courts of Law and Unforeseen Contingencies

Anderlini, Luca - 2008

We study a contracting model with unforeseen contingencies in which the court is an active player. Ex-ante, the contracting parties cannot include the risky unforeseen contingencies in the contract they draw up. Ex-post the court observes whether an unforeseen contingency occurred, and decides...

Persistent link: https://www.econbiz.de/10012771125

Efficiency and Equilibrium When Preferences are Time-Inconsistent

Mariotti, Thomas - 2008

We consider an exchange economy with time-inconsistent consumers whose preferences are additively separable. When these consumers trade in a sequence of markets, their time-inconsistency may introduce a non-convexity that gives them an incentive to trade lotteries. If there are many consumers,...

Persistent link: https://www.econbiz.de/10012771131

Unforeseen Contingencies

Al-Najjar, Nabil I. - 2008

We develop a model of unforeseen contingencies. These are contingencies that are understood by economic agents ' their consequences and probabilities are known' but are such that every description of such events necessarily leaves out relevant features that have a non-negligible impact on the...

Persistent link: https://www.econbiz.de/10012771136

Ownership, Incentives and Monitoring

Bai, Chong-En - 2008

This paper studies the effect of ownership structure on workers' incentives for investing in firm-specific human capital. Particularly, we analyse such incentivers and monitoring under employee ownership and capitalist ownership. In our model, the employee-owned firm is a firm bought by its...

Persistent link: https://www.econbiz.de/10012771139

Efficiency Rents of Pumped-Storage Plants and Their Uses for Operation and Investment Decisions

Horsley, Anthony - 2008

We apply duality methods of linear and convex programming to the problems of operation and rental valuation of facilities for conversion and storage of cyclically priced goods, e.g. , energy. Both problems are approached by shadow-pricing the stock (which is a purely intermediate commodity); and...

Persistent link: https://www.econbiz.de/10012771141

Strategic Consultation in the Presence of Career Concerns

Levy, Gilat - 2008

In this paper I analyse the strategic interaction of decision makers and their advisers in a consultation process. I find that when agents are concerned about their reputation, consultation results in sub-optimal sharing of information; some decision makers may deliberately act unilaterally and...

Persistent link: https://www.econbiz.de/10012771143

The Short-Run Approach to Lrmc Pricing for Multiple Outputs with Nondifferentiable Costs

Horsley, Anthony - 2008

Using convex calculus, we extend the Wong-Viner Theorem to nondifferentiable costs by equating the capital inputs' rental prices to their profit-imputed marginal values. Thus extended, the short-run approach to LRMC pricing is applied to peak-load pricing with storage

Persistent link: https://www.econbiz.de/10012771147

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