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Can there be a Market for Cheap-Talk Information? An Experimental Investigation

Cabrales, Antonio; Feri, Francesco; Gottardi, Piero; … - 2018

This paper reports on experiments testing the viability of markets for cheap talk information. We find that the poor quality of the information transmitted leads to a collapse of information markets. The reasons for this are surprising given the previous experimental results on cheap-talk games....

Persistent link: https://www.econbiz.de/10011872032

Dynamic commercial lobbying

Groll, Thomas; Ellis, Christopher J. - 2013

This study explains the observed repeated personal interactions between lobbyists and policymakers. The analysis uses a dynamic model of commercial lobbying in which citizens may hire lobbyists to present policy proposals on their behalf to policymakers. It is shown that repeated interactions...

Persistent link: https://www.econbiz.de/10010291650

A nested contest: Tullock meets the all-pay auction

Amegashie, J. Atsu - 2012

(lottery) contest and the all-pay auction. A Nash equilibrium exists for all parameters of the nested contest. If and only if … aggregate efforts in the all-pay auction are higher than the aggregate efforts in the Tullock contest, then aggregate efforts in … the nested contest may not lie between aggregate efforts in the all-pay auction and aggregate efforts in the Tullock …

Persistent link: https://www.econbiz.de/10010289358

The Pygmalion effect : an agency model with reference dependent preferences

Daido, Kohei; Itoh, Hideshi - 2005

We attempt to formulate and explain two types of self-fulfilling prophecy, called the Pygmalion effect (if a supervisor thinks her subordinates will succeed, they are more likely to succeed) and the Galatea effect (if a person thinks he will succeed, he is more likely to succeed). To this...

Persistent link: https://www.econbiz.de/10010261169

Optimal incentive contracts for a worker who envies his boss

Dur, Robert; Glazer, Amihai - 2004

A worker's utility may increase in his own income, but envy can make his utility decline with his employer's income. Such behavior may call for high-powered incentives, so that increased effort by the worker little increases the income of his employer. This paper uses a principalagent model to...

Persistent link: https://www.econbiz.de/10010261264

Sustainable social spending

Lindbeck, Assar - 2005

The paper discusses a number of threats to the financial sustainability of social spending: increased internationalization of national economies, gradually higher relative costs of producing a number of human services, the ?graying? of the population, slower productivity growth in the private...

Persistent link: https://www.econbiz.de/10010261370

A model of income insurance and social norms

Lindbeck, Assar; Persson, Mats - 2006

A large literature on ex ante moral hazard in income insurance emphasizes that the individual can affect the probability of an income loss by choice of lifestyle and hence, the degree of risk-taking. The much smaller literature on moral hazard ex post mainly analyzes how a ?moral hazard...

Persistent link: https://www.econbiz.de/10010261422

Banking regulation and prompt corrective action

Freixas, Xavier; Parigi, Bruno Maria - 2007

We explore the rationale for regulatory rules that prohibit banks from developing some of their natural activities when their capital level is low, as epitomized by the US Prompt Corrective Action (PCA). This paper is built on two insights. First, in a moral hazard setting, capital requirement...

Persistent link: https://www.econbiz.de/10010264241

A continuous theory of income insurance

Lindbeck, Assar; Persson, Mats - 2010

In this paper we treat an individual's health as a continuous variable, in contrast to the traditional literature on income insurance, where it is regularly treated as a binary variable. This is not a minor technical matter; in fact, a continuous treatment of an individual's health sheds new...

Persistent link: https://www.econbiz.de/10010270506

How to deal with covert child labour, and give children an effective education, in a poor developing country: An optimal taxation problem with moral hazard

Cigno, Alessandro - 2010

Given that credit and insurance markets are imperfect, and given also that intra-household transfers, and much of the work a child does, are private information, the second-best policy uses a combination of need and merit based education awards, together with a mix of taxes on parental income,...

Persistent link: https://www.econbiz.de/10010270527