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Contracting under Ex Post Moral Hazard and Non-Commitment

Boyer, M. Martin - Centre Interuniversitaire de Recherche en Analyse des … - 2001

This paper characterizes the optimal insurance contract in an environment where an informed agent can misrepresent the …), the optimal contract is such that higher losses are over-compensated while lower losses are on average under …-compensated. The amount by which higher losses are over-compensated decreases as the loss increases. The optimal contract may then be …

Persistent link: https://www.econbiz.de/10005101113

Resistance is Futile: An Essay in Crime and Commitment

Boyer, M. Martin - Centre Interuniversitaire de Recherche en Analyse des … - 2001

a contract stipulating some transfer of funds from one player (say the agent) to the next (the principal) contingent on … separating contract exists. The optimal pooling contract can then be divided into two parts. For a proportion of Dares (x … inflicted to Dares convicted of a crime has no impact on the optimal contract. Investment in prevention is always beneficial if …

Persistent link: https://www.econbiz.de/10005100773

Informational Asymmetries in Laboratory Asset Markets with State-Dependent Fundamentals

Keser, Claudia; Markstädter, Andreas - Centre Interuniversitaire de Recherche en Analyse des … - 2014

We investigate the formation of market prices in a new experimental setting involving multi-period call-auction asset markets with state-dependent fundamentals. We are particularly interested in two informational aspects: (1) the role of traders who are informed about the true state and/or (2)...

Persistent link: https://www.econbiz.de/10011183675

Optimal Trading Mechanisms with Ex Ante Unidentified Traders

Lu, Hu; Robert, Jacques - Centre Interuniversitaire de Recherche en Analyse des … - 1997

We analyze optimal trading mechanisms in environments where each trader owns some units of a good to be traded and may be either a seller or a buyer, depending on the realization of privately observed valuations. First, the concept of virtual valuation is extended to ex ante unidentified...

Persistent link: https://www.econbiz.de/10005100533

Disclosure of Information in Regulatory Proceedings

Lewis, Tracy; Poitevin, Michel - Centre Interuniversitaire de Recherche en Analyse des … - 1995

This paper examines how different rules for presentation of evidence affect verdicts in regulatory hearings and the welfare and efficiency properties these procedures exhibit. The hearing is modeled as a game of imperfect information in which the respondent is privately informed about validity...

Persistent link: https://www.econbiz.de/10005100618

Ex Ante Incentives and Ex Post Flexibility

Boyer, Marcel; Robert, Jacques - Centre Interuniversitaire de Recherche en Analyse des … - 1996

Our objective in this paper is to illustrate and better understand the unavoidable arbitrage between incentives and flexibility in contexts of asymmetric information and to characterize the general features of an appropriate response to this challenge. We show that procedures and institutions in...

Persistent link: https://www.econbiz.de/10005100623

Contract Renegotiation and Organizational Design

Poitevin, Michel - Centre Interuniversitaire de Recherche en Analyse des … - 1995

This paper studies the implications of non-commitment for organizational design. An organizational form must trade-off between the coordination benefits associated with the centralization of information and its associated costs in terms of renegotiation. This analysis makes precise what these...

Persistent link: https://www.econbiz.de/10005100644

Project Financing when the Principal Cannot Commit

Boyer, M. Martin - Centre Interuniversitaire de Recherche en Analyse des … - 2001

Suppose an entrepreneur needs funds from a financier to invest in a risky project whose cost is fixed, and whose return may be high or low. Suppose also that the project's realized return is an information that is private to the entrepreneur. If the amount the entrepreneur pays back to the...

Persistent link: https://www.econbiz.de/10005100663

Setting Standards for Credible Compliance and Law Enforcement

Boyer, Marcel; Lewis, Tracy; Liu, Wei Lin - Centre Interuniversitaire de Recherche en Analyse des … - 1996

This paper examines the setting of optimal legal standards to simultaneously induce parties to invest in care and to motivate law enforcers to detect violators of the law. The strategic interaction between care providers and law enforcers determines the degree of efficiency achieved by the...

Persistent link: https://www.econbiz.de/10005100692

Sharing Liability Between Banks and Firms: The Case of Industrial Safety Risk

Boyer, Marcel; Porrini, Donatella - Centre Interuniversitaire de Recherche en Analyse des … - 2007

We characterize the distortions in environmental liability sharing between firms and banks that the imperfect implementation of government policies implies. These distortions stem from three factors: the presence of moral hazard, the use of objective functions by firms and banks that differs...

Persistent link: https://www.econbiz.de/10005100710