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Information, evolution and utility
Swinkels, Jeroen M.; Samuelson, Larry - In: Theoretical Economics 1 (2006) 1, pp. 119-142
Human utility embodies a number of seemingly irrational aspects. The leading example in this paper is that utilities often depend on the presence of salient unchosen alternatives. Our focus is to understand <i>why</i> an evolutionary process might optimally lead to such seemingly dysfunctional features...
Persistent link: https://www.econbiz.de/10011599367
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Slow persuasion
Escudé, Matteo; Sinander, Ludvig - In: Theoretical Economics 18 (2023) 1, pp. 129-162
What are the value and form of optimal persuasion when information can be generated only slowly? We study this question … in a dynamic model in which a `sender' provides public information over time subject to a graduality constraint, and a … sender's equilibrium value function and information provision. We show that the graduality constraint inhibits information …
Persistent link: https://www.econbiz.de/10014536988
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Information and targeted spending
Eguia, Jon X.; Nicolò, Antonio - In: Theoretical Economics 14 (2019) 2, pp. 373-402
We present an electoral theory on the public provision of local public goods to an imperfectly informed electorate. We show that electoral incentives lead to greater spending if the electorate is not well informed. A more informed electorate induces candidates to target funds only to specific...
Persistent link: https://www.econbiz.de/10012215297
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Optimal delegated search with adverse selection and moral hazard
Ulbricht, Robert - In: Theoretical Economics 11 (2016) 1, pp. 253-278
unobservable, requiring search to be self-enforcing. The two information asymmetries are mutually enforcing each other; if one is …
Persistent link: https://www.econbiz.de/10011599569
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A general solution method for moral hazard problems
Ke, Rongzhu; Ryan, Christopher Thomas - In: Theoretical Economics 13 (2018) 3, pp. 1425-1481
Principal-agent models are pervasive in theoretical and applied economics, but their analysis has largely been limited to the ``first-order approach'' (FOA) where incentive compatibility is replaced by a first-order condition. This paper presents a new approach to solving a wide class of...
Persistent link: https://www.econbiz.de/10012010060
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A unifying approach to incentive compatibility in moral hazard problems
Kirkegaard, René - In: Theoretical Economics 12 (2017) 1, pp. 25-51
A new approach to moral hazard is presented. Once local incentive compatibility is satisfied, the problem of verifying global incentive compatibility is shown to be isomorphic to the problem of comparing two classes of distribution functions. Thus, tools from choice under uncertainty can be...
Persistent link: https://www.econbiz.de/10012010062
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Experimentation in Organizations
Moroni, Sofia - In: Theoretical Economics 17 (2022) 3, pp. 1403-1450
We consider a moral hazard problem in which a principal provides incentives to a team of agents to work on a risky project. The project consists of two milestones of unknown feasibility. While working unsuccessfully, the agents’ private beliefs regarding the feasibility of the project decline....
Persistent link: https://www.econbiz.de/10014537018
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Monitoring experts
Azrieli, Yaron - In: Theoretical Economics 16 (2021) 4, pp. 1313-1350
We study the design of contracts that incentivize experts to collect information and truthfully report it to a decision … contracts by comparing the value of information and its cost. …
Persistent link: https://www.econbiz.de/10013189061
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Wages as signals of worker mobility
Chen, Yu; Doyle, Matthew; González, Francisco M. - In: Theoretical Economics 19 (2024) 1, pp. 499-549
private information. Employers can commit neither to post contracts such that wages are a function of tenure nor to disregard … allocation under full information. When the costs of creating entry jobs are sufficiently large, the efficient equilibrium may …
Persistent link: https://www.econbiz.de/10014537025
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Persistence in a dynamic moral hazard game
Bohren, J. Aislinn - In: Theoretical Economics 19 (2024) 1, pp. 449-498
This paper studies how the persistence of past choices can be used to create incentives in a continuous time stochastic game. A large player, such as a firm, interacts with a sequence of small players, such as customers. The large player faces moral hazard and her actions are imperfectly...
Persistent link: https://www.econbiz.de/10014536879