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Procurement when Price and Quality Matter

Asker, John; Cantillon, Estelle - C.E.P.R. Discussion Papers - 2007

A buyer seeks to procure a good characterized by its price and its quality from suppliers who have private information about their cost structure (fixed cost + marginal cost of providing quality). We solve for the optimal buying procedure, i.e. the procedure that maximizes the buyer's expected...

Persistent link: https://www.econbiz.de/10005661783

Optimal Procurement When Both Price and Quality Matter

Asker, John; Cantillon, Estelle - C.E.P.R. Discussion Papers - 2005

A buyer seeks to procure a good characterized by its price and its quality from suppliers who have private information about their cost structure (fixed cost + marginal cost of providing quality). We solve for the optimal buying mechanism, i.e. the procedure that maximizes the buyer’s expected...

Persistent link: https://www.econbiz.de/10005123964

Coarse Matching and Price Discrimination

Hoppe, Heidrun C.; Moldovanu, Benny; Ozdenoren, Emre - C.E.P.R. Discussion Papers - 2007

of a coarse matching scheme consisting of two classes of agents on each side, in terms of matching surplus (output), the …, our philosophy is that, if the worst-case scenario under coarse matching is not too bad relative to what is achievable by … more complex, finer schemes, a coarse matching scheme will turn out to be preferable once the various transaction costs …

Persistent link: https://www.econbiz.de/10005792482

Bargaining in Mergers and Termination Fees

Rosenkranz, Stephanie; Weitzel, Utz - C.E.P.R. Discussion Papers - 2007

We model takeovers as a bargaining process and explain termination fees for, both, the target and the acquirer, subject to parties’ bargaining power and outside options. In equilibrium, termination fees are offered by firms with outside options in exchange for a greater share of merger...

Persistent link: https://www.econbiz.de/10005498188

Methods of Privatization: Auctions, Bargaining and Give-Aways

Schmidt, Klaus M.; Schnitzer, Monika - C.E.P.R. Discussion Papers - 1997

The paper surveys recent results of auction theory, bargaining theory and political economy in order to compare …

Persistent link: https://www.econbiz.de/10005666841

Job Protection Laws and Agency Problems Under Asymmetric Information

Schmitz, Patrick W - C.E.P.R. Discussion Papers - 2004

Under symmetric information, a job protection law that says that a principal who has hired an agent today must also employ them tomorrow can only reduce the two parties’ total surplus. The law restricts the principal’s possibilities to maximize their profit, which equals the total surplus,...

Persistent link: https://www.econbiz.de/10005656330

Renegotiation Before Contract Execution

Wambach, Achim - C.E.P.R. Discussion Papers - 1999

By offering or choosing a contract the informed agent might reveal information to the principal which could be used for immediate renegotiation. This is discussed in an axiomatic approach. We show that if, given the revealed information, there exists a contract which is preferred by everyone,...

Persistent link: https://www.econbiz.de/10005504482

Bargaining with Informational Externalities in a Market Equilibrium

Drugov, Mikhail - C.E.P.R. Discussion Papers - 2014

This paper studies a dynamic bargaining model with informational externalities between bargaining pairs. Two principals bargain with their respective agents about the price they will pay for their work while its cost is agents' private information and correlated between them. The principals...

Persistent link: https://www.econbiz.de/10011083946

Open Covenants, Privately Arrived At

Fingleton, John; Raith, Michael - C.E.P.R. Discussion Papers - 2001

This Paper analyses strategic bargaining between two agents each of whom negotiates on behalf of a principal. The principals face uncertainty about the bargaining skills of their agents as measured by the agents' abilities to assess the opponent's preferences. Agents then have an incentive to...

Persistent link: https://www.econbiz.de/10005067665

Competitive Insurance Markets Under Adverse Selection and Capacity Constraints

Inderst, Roman; Wambach, Achim - C.E.P.R. Discussion Papers - 1999

Ever since the seminal work by Rothschild and Stiglitz (1976) on competitive insurance markets under adverse selection the equilibrium-non-existence problem has been one of the major puzzles in insurance economics. We extend the original analysis by considering firms that face capacity...

Persistent link: https://www.econbiz.de/10005661929