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...

There often exists a supermajority rule that enables the minority party to delay or prevent a vote on a bill. I construct a two-period model consisting of a representative voter, self-interested parties, and a media outlet. In the model, the majority party has an incentive to misrepresent the...

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...

This paper studies the optimal refund mechanism when an uninformed buyer can privately acquire information about his valuation over time. In principle, a refund mechanism can specify the odds that the seller requires the product returned while issuing a (partial) refund, which we call stochastic...

We analyze the canonical nonlinear pricing model with limited information. A seller offers a menu with a finite number of choices to a continuum of buyers with a continuum of possible valuations. By revealing an underlying connection to quantization theory, we derive the optimal finite menu for...

I study competition among asymmetrically informed lenders in loan markets. In the past few years, a new competitor called FinTech emerges in financial markets. In loan markets, an important feature of FinTech companies is that they can acquire information about borrowers' characters, that...

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...

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...

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,...

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...