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Netzer, Nick; Schmutzler, Armin - C.E.P.R. Discussion Papers - 2010

We examine a "Rotten Kid" model (Becker 1974) where a player with social preferences interacts with an egoistic player. We assume that social preferences are intention-based rather than outcome-based. In a very general multi-stage setting we show that any equilibrium must involve mutually unkind...

Persistent link: https://www.econbiz.de/10008468559

Do Sellers Offer Menus of Contracts to Separate Buyer Types? An Experimental Test of Adverse Selection Theory

Hoppe, Eva I; Schmitz, Patrick W - C.E.P.R. Discussion Papers - 2013

In the basic adverse selection model, a seller makes a contract offer to a privately informed buyer. A fundamental …

Persistent link: https://www.econbiz.de/10011083588

Contracting under Incomplete Information and Social Preferences: An Experimental Study

Hoppe, Eva I; Schmitz, Patrick W - C.E.P.R. Discussion Papers - 2013

Principal-agent models in which the agent has access to private information before a contract is signed are a … cornerstone of contract theory. We have conducted an experiment with 720 participants to explore whether the theoretical insights … the principals make contract offers, they anticipate that social preferences affect agents' behavior. …

Persistent link: https://www.econbiz.de/10011084433

The Costs and Benefits of Additional Information in Agency Models with Endogenous Information Structures

Hoppe, Eva I; Schmitz, Patrick W - C.E.P.R. Discussion Papers - 2009

We study the effect of additional private information in an agency model with an endogenous information structure. If more private information becomes available to the agent, this may hurt the agent, benefit the principal, and affect the total surplus ambiguously.

Persistent link: https://www.econbiz.de/10005036239

Can Contracts Solve the Hold-Up Problem? Experimental Evidence

Hoppe, Eva I; Schmitz, Patrick W - C.E.P.R. Discussion Papers - 2009

In the contract-theoretic literature, there is a vital debate about whether contracts can mitigate the hold-up problem … ruled out, we find that option contracts significantly improve investment incentives compared to a no-contract treatment …

Persistent link: https://www.econbiz.de/10005067500

Gathering Information before Signing a Contract: Experimental Evidence

Hoppe, Eva I; Schmitz, Patrick W - C.E.P.R. Discussion Papers - 2009

A central insight of agency theory is that when a principal offers a contract to a privately informed agent, the …

Persistent link: https://www.econbiz.de/10005789080

The cost of contract renegotiation: Evidence from the local public sector

Gagnepain, Philippe; Ivaldi, Marc; Martimort, David - C.E.P.R. Discussion Papers - 2010

The renegotiation of regulatory contracts is known to prevent regulators from achieving the full commitment efficient outcome in dynamic contexts. However, assessing the cost of such renegotiation remains an open issue from an empirical viewpoint. To address this question, we fit a structural...

Persistent link: https://www.econbiz.de/10008684689

The Ratchet Effect Re-examined: A Learning Perspective

Bhaskar, Venkataraman - C.E.P.R. Discussion Papers - 2014

We study dynamic moral hazard where principal and agent are symmetrically uncertain about job difficulty. Since effort is unobserved, shirking leads the principal to believe that the job is hard, increasing the agent's continuation value. So deterring shirking requires steeper incentives, which...

Persistent link: https://www.econbiz.de/10011083528

Dynamic Moral Hazard, Learning and Belief Manipulation

Bhaskar, Venkataraman - C.E.P.R. Discussion Papers - 2012

We study dynamic moral hazard, with symmetric ex ante uncertainty and learning. Unlike Holmstrom's career concerns model, uncertainty pertains to the difficulty of the job rather than the general talent of the agent, so that contracts are required to provide incentives. Since effort is privately...

Persistent link: https://www.econbiz.de/10011083746

Bonus Culture: Competitive Pay, Screening, and Multitasking

Bénabou, Roland; Tirole, Jean - C.E.P.R. Discussion Papers - 2013

This paper analyzes the impact of labor market competition and skill-biased technical change on the structure of compensation. The model combines multitasking and screening, embedded into a Hotelling-like framework. Competition for the most talented workers leads to an escalating reliance on...

Persistent link: https://www.econbiz.de/10011083769