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Adverse Selection in Insurance Markets : On-Demand Contracts As a Screening Device

Braun, Alexander - 2020

We show that on-demand insurance contracts, an innovative form of coverage recently introduced through the InsurTech sector, can serve as a screening device. To this end, we develop a new adverse selection model consistent with Wilson (1977), Miyazaki (1977) and Spence (1978). Consumers have...

Persistent link: https://www.econbiz.de/10012822927

Disclosure of information under competition : an experimental study

Sheth, Jesal Dilip - 2019

-disclosure as bad news, leading to the failure of complete unravelling. This paper experimentally examines whether competition … examine whether receivers' naivety about non-disclosed information decreases with competition between senders. We find that … complete unravelling fails to occur without competition. However, with competition, there is significantly higher unravelling …

Persistent link: https://www.econbiz.de/10012024603

Private Monitoring, Collusion and the Timing of Information

Khalil, Fahad; Lawarrée, Jacques; Scott, Troy Joseph - 2015

When a principal’s monitoring information is private (non-verifiable), the agent should be concerned that the principal could misrepresent the information to reduce the agent’s wage or collect a monetary penalty. Restoring credibility may lead to an extreme waste of resources - the so-called...

Persistent link: https://www.econbiz.de/10014043494

Common Agency with Informed Principals : Menus and Signals

Galperti, Simone - 2015

This paper considers general games in which multiple informed principals simultaneously compete to influence the decisions of a common agent. It shows that we can characterize all outcomes of any game in which principals delegate the final decisions to the agent using arbitrary mechanisms, by...

Persistent link: https://www.econbiz.de/10013028126

Contracting under Adverse Selection : Certifiable vs. Uncertifiable Information

Schmitz, Patrick W. - 2021

The analysis of adverse selection problems in seller-buyer relationships has typically been based on the assumption that private information is uncertifiable, while in practice it may well be certifiable. If a buyer has certifiable private information, he can conceal evidence, but he cannot...

Persistent link: https://www.econbiz.de/10013247965

Contract Litigation as Information Revelation Channel and its Implications on Reputation (Dis)Incentives

Tzang, F.L. Philip - 2011

We examine how the reputation concern of contracting parties affects contractual incentives if information is transmitted to the public through contract litigation. In a career concern framework, the performance of the long-lived seller is revealed to future buyers only if contractual disputes...

Persistent link: https://www.econbiz.de/10013125615

Common agency with informed principals : menus and signals

Galperti, Simone - 2011

I analyze common agency games in which the principals, and possibly the agent, have private information. I distinguish between games in which the principals delegate the final decisions to the agent, and games in which they retain some decision power after offering their mechanisms. I show that,...

Persistent link: https://www.econbiz.de/10009376226

Private monitoring, collusion and the timing of information

Khalil, Fahad; Lawarrée, Jacques; Scott, Troy J. - 2013

When the information used by a principal to monitor an agent is private, and thus non-verifiable by a third party, the principal has a credibility issue with the agent. The agent should be concerned that the principal could misrepresent the information in order to collect a monetary penalty from...

Persistent link: https://www.econbiz.de/10010212662

Learning from failures : optimal contract for experimentation and production

Khalil, Fahad; Lawarrée, Jacques; Rodivilov, Alexander - 2018

Before embarking on a project, a principal must often rely on an agent to learn about its profitability. We model this learning as a two-armed bandit problem and highlight the interaction between learning (experimentation) and production. We derive the optimal contract for both experimentation...

Persistent link: https://www.econbiz.de/10011926023

Delegation of Information Verification

Kim, Doyoung - 2013

An agent may manipulate information when transmitting it to the principal. A direct response to this problem is to verify the information. The paper explores a situation where the principal engages in information verification herself or alternatively delegates it to the agent. The paper finds...

Persistent link: https://www.econbiz.de/10013077582