Search Results - subject:"OPTIMAL CONTRACT"

How should donors give foreign aid? Project aid versus budget support

Jelovac, Izabela; Vandeninden, Frieda - Groupe d'Analyse et de Théorie Économique Lyon … - 2008

We develop a theoretical model to compare the two major foreign aid modalities: project aid and budget support. These two modalities have a different impact on the production of ‘developmental goods’. Firstly, conditionality can be associated with budget support, but only a subset of the...

Persistent link: https://www.econbiz.de/10005056878

Testing Leniency Programs Experimentally: The Impact of Change in Parameterization

Krajcova, Jana - Center for Economic Research and Graduate Education and … - 2008

I analyze subjects’ sensitivity to parametric change that does not affect the theoretical prediction. I find that increasing the value of an illegal transaction to a briber and reducing the penalties to both culprits leads to more bribes being paid but does not affect the cooperation of the...

Persistent link: https://www.econbiz.de/10005738159

Testing Leniency Programs Experimentally: The Impact of “Natural” Framing

Krajcova, Jana; Ortmann, Andreas - Center for Economic Research and Graduate Education and … - 2008

We study the effects of loaded instructions in a bribery experiment. We find a strong gender effect: men and women react differently to real-world framing. The treatment effect becomes significant once we allow for genderspecific coefficients. Our paper contributes to the (small) literature on...

Persistent link: https://www.econbiz.de/10005146555

Optimal External Debt and Default

Guimaraes, Bernardo - Centre for Economic Performance, LSE - 2008

countries through the Brady agreements. Keywords: sovereign debt; default; capital flows; optimal contract; world interest … reduction following the increase in US interest rates would have been part of an optimal contract drawn up in the 1970’s. 4 The … related to the literature on consumers’ and firms’ debt. In particular, the optimal contract in this model bears resemblance …

Persistent link: https://www.econbiz.de/10005151019

OPTIMAL CONTRACTS WITH TEAM PRODUCTION AND HIDDEN INFORMATION: AN EXPERIMENT

Charness, Gary B; Cabrales, Antonio - Department of Economics, University of California-Santa … - 2008

It is standard in agency theory to search for incentive-compatible mechanisms on the assumption that people care only about their own material wealth. Yet it may be useful to consider social forces in mechanism design and contract theory. We devise an experiment to explore optimal contracts in a...

Persistent link: https://www.econbiz.de/10010538305

How should donors give foreign aid? Project aid versus budget support

Jelovac, Izabela; Vandeninden, Frieda - HAL - 2008

We develop a theoretical model to compare the two major foreign aid modalities: project aid and budget support. These two modalities have a different impact on the production of 'developmental goods'. Firstly, conditionality can be associated with budget support, but only a subset of the...

Persistent link: https://www.econbiz.de/10008789054

Cash Breeds Success : The Role of Financing Constraints in Patent Races

Schroth, Enrique; Szalay, Dezsö - Department of Economics, University of Warwick - 2008

This paper studies the impact of financing constraints on the equilibrium of a patent race. We develop a model where firms finance their R&D expenditures with an investor who cannot verify their effort. We solve for the optimal financial contract of any firm along its best-response function. In...

Persistent link: https://www.econbiz.de/10005368737

Executive compensation and earnings management under moral hazard

Sun, Bo - In: Journal of Economic Dynamics and Control 41 (2014) C, pp. 276-290

This paper analyzes executive compensation in a setting where managers may take a costly action to manipulate corporate performance, and whether managers do so is stochastic. We show that an increase in the possibility of manipulation actually calls for executive pay to be more responsive to...

Persistent link: https://www.econbiz.de/10010779393

Moral hazard with the (unlikely) possibility of catastrophes

Bednarek, Ziemowit; Patel, Pratish - In: Economics Letters 124 (2014) 3, pp. 386-388

compensation contract between a principal and an agent. The optimal contract depends on all the moments and not just the variance. …

Persistent link: https://www.econbiz.de/10010930737

Existence and non-existence in the moral hazard problem

Moroni, Sofia; Swinkels, Jeroen - In: Journal of Economic Theory 150 (2014) C, pp. 668-682

We provide a new class of counter-examples to existence in a simple moral hazard problem in which the first-order approach is valid. In contrast to the Mirrlees example, unbounded likelihood ratios on the signal technology are not central. Rather, our examples center around the behavior of the...

Persistent link: https://www.econbiz.de/10011043054