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Dinerstein, Michael; Opper, Isaac - 2022

What happens when employers would like to screen their employees but only observe a subset of output? We specify a model in which heterogeneous employees respond by producing more of the observed output at the expense of the unobserved output. Though this substitution distorts output in the...

Persistent link: https://www.econbiz.de/10014079145

Advantageous Selection Without Moral Hazard (with an Application to Life Care Annuities)

De Donder, Philippe; Leroux, M.‐L; Salanié, François - 2022

Advantageous (or propitious) selection occurs when an increase in the premium of an insurance contract induces high-cost agents to quit, thereby reducing the average cost among remaining buyers. Hemenway (1990) and many subsequent contributions motivate its advent by differences in risk-aversion...

Persistent link: https://www.econbiz.de/10014083046

Information, Asymmetric Incentives, or Withholding? Understanding the Self-Enforcement of Value-Added Tax

Waseem, Mazhar - 2019

During the period 1996-2000, the coverage of VAT in Pakistan rose by twenty times in terms of the number of firms in the tax net and by ten times in terms of the volume of transactions subject to it. This paper leverages this staggered introduction of VAT in the country to estimate its...

Persistent link: https://www.econbiz.de/10012866312

Extraterritorial Trade Sanctions : Theory and Application to the US-Iran-EU Conflict

Janeba, Eckhard - 2022

from abandoning the international economic order. In the context of the US-Iran-EU conflict, I argue that the oil and gas …

Persistent link: https://www.econbiz.de/10013300872

Informed-Principal Problem in Mechanisms with Limited Commitment

Kwon, Suehyun - 2019

This paper studies mechanism design with limited commitment where agents have persistent correlated types over the infinite horizon. The mechanism designer now faces the informed-principal problem in addition to usual issues with i.i.d. types. With an infinite horizon and nondurable good, there...

Persistent link: https://www.econbiz.de/10012892075

Competitive Procurement with Ex Post Moral Hazard

Chakraborty, Indranil; Khalil, Fahad; Lawarrée, Jacques - 2021

Unlike standard auctions, we show that competitive procurement may optimally limit competition or use inefficient allocation rules that award the project to a less efficient firm with positive probability. Procurement projects often involve ex post moral hazard after the competitive process is...

Persistent link: https://www.econbiz.de/10013249652

Sharing budgetary austerity under free mobility and asymmetric information : an optimal regulation approach to fiscal federalism

Breuille, Marie-Laure; Gary-Bobo, Robert J. - 2005

In the present article, Tiebout meets Laffont and Tirole in the land of Fiscal Federalism. We use a non-trivial Principal-Multi-Agent model to characterize the optimal intergovernmental grant schedule, when the cost of local public goods depends on hidden characteristics and actions of local...

Persistent link: https://www.econbiz.de/10010261345

A new approach to solving production-appropriation games with many heterogeneous players

Cornes, Richard; Hartley, Roger; Tamura, Yuji - 2010

We set out a model of production and appropriation involving many players, who differ with respect to both resource endowments and productivities. We write down the model in a novel way that permits our analysis to avoid the proliferation of dimensions associated with the best response function...

Persistent link: https://www.econbiz.de/10010270524

Mobility and conflict

Bhattacharya, Sourav; Deb, Joyee; Kundu, Tapas - 2012

We study the role of inter-group differences in the emergence of conflict. In our setting, two groups compete for the …, that the opposition can either accept, or reject and wage conflict. Expropriating a large share of resources increases … of conflict. In equilibrium, allocations are non-monotonic in the cost of mobility. Moreover, limited commitment with …

Persistent link: https://www.econbiz.de/10010280829

Private Information and Optimal Infant Industry Protection

Ravikumar, B.; Riezman, Raymond Glenn; Zhang, Yuzhe - 2022

We study infant industry protection using a dynamic model in which the industry’s cost is initially higher than that of foreign competitors. The industry can stochastically lower its cost via learning by doing. Whether the industry has transitioned to low cost is private information. We use a...

Persistent link: https://www.econbiz.de/10014082794