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Setting the dowry optimally to extract the full surplus: a contract theory perspective

Batabyal, Amitrajeet A; Beladi, Hamid - In: Economics Bulletin 33 (2013) 3, pp. 2034-2041

We study the contractual interaction between the fathers of a prospective groom and a prospective bride in a traditional society. Based on his valuation of the groom, the bride's father approaches the groom's father with an offer of marriage. The groom's father does not know the quality of the...

Persistent link: https://www.econbiz.de/10010686033

Hybrid Cardinal Tournaments

Tsoulouhas, Theofanis - In: Economics Bulletin 30 (2010) 3, pp. 2279-2288

This paper proposes an alternative to standard cardinal tournaments. The analysis contrasts "hybrid" cardinal … tournaments to standard cardinal tournaments and piece rates. It shows that providing for partial insurance against common … weights), or than providing for no insurance at all via piece rates. Hybrid tournaments increase the principal's profit …

Persistent link: https://www.econbiz.de/10011278509

Pooling promises with moral hazard

Panaccione, Luca; Goulão, Catarina - In: Economics Bulletin 35 (2015) 1, pp. 460-465

We extend the framework of Dubey and Geanakoplos (2002) to the case of moral hazard. We analyze the equilibrium properties of the model and we show that equal ex-ante consumers may choose to promise differently, and, as a consequence, choose different actions. This illustrates how the pool of...

Persistent link: https://www.econbiz.de/10011199635

Managerial Incentive Problems: The Role of Multiple Signals

Ogaku, Michiko - In: Economics Bulletin 35 (2015) 1, pp. 106-111

Career concerns can mitigate moral hazard problems, but these diminish as the agent's retirement age approaches. Addressing this problem, this note draws attention to the role of the interaction between contractible and non-contractible signals.

Persistent link: https://www.econbiz.de/10011199637

Moral hazard and optimal insurance contract with a continuum effort

Shahidi, Niousha - In: Economics Bulletin 34 (2014) 3, pp. 1350-1360

In the research works, moral hazard is usually represented in two natural states (accident and no accident). In this case, the determination of the optimal contract could be made graphically. The mathematicaing is become more complicated when we consider infinite natural states and efforts under...

Persistent link: https://www.econbiz.de/10010796129

Status Incentives with Discrete Effort: A Note

Dey, Oindrila; Banerjee, Swapnendu - In: Economics Bulletin 34 (2014) 2, pp. 1205-1213

Using a moral hazard framework with limited liability with discrete effort levels we show that status incentives help in partially reducing the burden on monetary incentives. Yet, the disutility accruing from failure to achieve status dampens the efficiency of status as an incentive. The optimal...

Persistent link: https://www.econbiz.de/10010835900

A note on optimal commodity taxation with moral hazard and separable preferences

Panaccione, Luca; Ruscitti, Francesco - In: Economics Bulletin 30 (2010) 3, pp. 2380-2387

In this paper we show that differential commodity taxation is superfluous in an economy with moral hazard and separable preferences.

Persistent link: https://www.econbiz.de/10008492577

Inequity aversion in a model with moral hazard

Chernomaz, Kirill - In: Economics Bulletin 32 (2012) 3, pp. 2500-2510

In this paper we solve a parametric moral hazard model that incorporates risk and inequity aversion. In the model, the worker's effort is not contractible but the employer can link the worker's compensation to the revenue, a measure probabilistically related to the effort. The model can account...

Persistent link: https://www.econbiz.de/10011278788

Wage discrimination and partial compliance with the minimum wage law

Chang, Yang-Ming; Walia, Bhavneet - In: Economics Bulletin 10 (2007) 4, pp. 1-7

This paper presents a simple model to characterize the discriminatory behavior of a non-complying firm in a minimum-wage economy. In the analysis, the violating firm pays one â€œfavoredâ€ group of workers the statutory minimum and the other â€œnon-favoredâ€ group of workers a...

Persistent link: https://www.econbiz.de/10005416833

On strategy and the likelihood of success in marital matchmaking under uncertainty

Batabyal, Amitrajeet - In: Economics Bulletin 10 (2004) 7, pp. 1-7

Individuals wishing to get married have made increasing use of matchmakers. This notwithstanding, economists have paid scant attention to the strategies employed by matchmakers and to the likelihood of success arising from the use of these strategies. Consequently, we first specify a...

Persistent link: https://www.econbiz.de/10005416945