Download or read book Essays on Optimal Contracts and Renegotiation written by Susanne Ohlendorf and published by . This book was released on 2009 with total page 111 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Essays on Optimal Contracts with Overconfidence written by Justin R. Downs and published by . This book was released on 2020 with total page 102 pages. Available in PDF, EPUB and Kindle. Book excerpt: This dissertation studies the effect of overconfidence on markets and organizations with asymmetric information. In the first chapter, I introduce overconfidence into a standard information gathering contracting model. A principal (she) hires an agent (he) to gather information about a project's cost before he implements the project, and the agent overestimates the probability of having a low implementation cost. The agent's overconfidence makes him more willing to sign the contract, but less willing to gather information, and increases in overconfidence may increase or decrease the principal's profit. In the second chapter, I study a labor market where firms hire overconfident workers who have private information about their productivity. I derive the optimal contracts for both a monopsonistic market, where one firm makes take-it-or-leave-it offers to the workers, as well as a competitive market, where many firms compete for the services of workers. Overconfidence causes the optimal contract to be distorted away from the efficient outcome in both markets, but a monopsonistic firm internalizes these distortions while a competitive firm does not. The main result is that monopsonistic markets can be more efficient than competitive markets. In the third chapter, I provide a review of several mathematical definitions of overconfidence used in the contract theory literature and apply them all to a generalized version of the information gathering model from Chapter 1. The effects overconfidence has on the agent's willingness to participate, to gather information, and on the principal's profit are all sensitive to the mathematical definition of overconfidence used in the model.
Download or read book Essays in Dynamic Contract Theory written by Rui Zhao and published by . This book was released on 2001 with total page 224 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Essays on Contract Theory written by Alice Peng-Ju Su and published by . This book was released on 2014 with total page 87 pages. Available in PDF, EPUB and Kindle. Book excerpt: This dissertation is primarily on the contractual design to account for various source of information asymmetry in a principal-agent(s) relationship. In the first chapter, I study the optimal provision of team incentives with the feasibility for the agents to coordinate private actions through repeated interaction with imperfect public monitoring. As the agents' imperfect monitoring of private actions is inferred from the stochastically correlated measurements, correlation of measurement noise, besides its risk sharing role in the conventional multiple-agent moral hazard problem, is crucial to the accuracy of each agent's inference on the other's private action. The principal's choice of performance pay to provide incentive via inducing competition or coordination among the agents thus exhibits the tradeoff between risk sharing and mutual inference between the agents. I characterize the optimal form of performance pay with respect to the correlation of measurement noise and find that it is not monotonic as suggested by the literature. In the second chapter, I study the optimal incentive provision in a principal-agent relationship with costly information acquisition by the agent. When it is feasible for the principal to induce or to deter perfect information acquisition, adverse selection or moral hazard arises in response to the principal's decision, as if she is able to design a contract not only to cope with an existing incentive problem, but also to implement the existence of an incentive problem. The optimal contract to implement adverse selection by inducing information acquisition, comparing to the second best menu, exhibits a larger rent difference between an agent in an efficient state and whom in an inefficient state. The optimal contract to implement moral hazard by deterring information acquisition, comparing to the second best debt contract, prescribes a lower debt and an equity share of output residual. With imperfect information acquisition or private knowledge of information acquiring cost, the contract offered to an uninformed agent is qualitatively robust, and that to the informed exhibits countervailing incentives. I relax the assumption of complete contracting and study truthful information revelation in an incomplete contracting environment in the third chapter. Truthful revelation of asymmetric information through shared ownership (partnership) is incorporated into the Property Right Theory of the firms. Shared ownership is optimal as an information transmission device, when it is incentive compatible within the relationship as well as when the relationship breaks, at the expense of the ex-ante incentive to invest in the relationship-specific asset as the hold-up concern is not efficiently mitigated. Higher (lower) level of integration is optimal with a lower marginal value of asset if the information rent effect is stronger (weaker) than the hold-up effect.
Download or read book Essays on International Trade Agreements and Contracts Under Renegotiation written by Kristina L. Buzard and published by . This book was released on 2012 with total page 106 pages. Available in PDF, EPUB and Kindle. Book excerpt: The first chapter of the dissertation addresses general issues in contracting with external enforcement. We study a contracting environment with specific investments in which renegotiation, and therefore hold-up, is possible. We show that taking account of the precise nature of trading and investment technologies is important for accurately determining the trading relationships in which efficient investment and trade will occur and that careful modeling of institutional detail and the information available to private parties and the external enforcement body (e.g. a court) are key. The second chapter presents a model of international trade agreements in which domestic policy-making power is shared between executive and legislative branches of government. Acknowledging the complexity of the legislative process as well as its susceptibility to lobbying reveals a political commitment role for trade agreements in that executives can use them to reduce incentives for lobbying so that the legislatures can better withstand political pressure. This helps explain the result from tests of the Grossman and Helpman (1994) model that there is too much protection relative to contributions given estimates of governments' social-welfare weights : I predict that contribution levels may in fact be low because tariffs have been raised to prevent political pressure and the increased risk of a trade disruption it engenders. The third chapter extends this model to a repeated-game framework, replacing the assumption of external enforcement with self-enforcing promises of future cooperation. Here, the inability of actors to make commitments affects the design of trade agreements in two ways: executives must not only take into account the legislatures' lobbying-driven propensity to revoke delegation and break the agreement, but also be robust to the executives' own incentives to renegotiate out of any punishment scheme. The design of the dispute resolution mechanism that makes the optimal punishment incentive compatible must balance two, often-conflicting, objectives: longer punishment periods help to enforce cooperation by increasing the costs of defecting from the agreement, but because the lobbies prefer the punishment outcome, this also incentivizes lobbying effort and with it the political pressure to break the agreement. Thus the model generates new predictions for the optimal design of mechanisms for resolving the disputes that arise in the course of trade-agreement relationships.
Download or read book Essays on Contract Remedies Incomplete Contracts and Renegotiation written by Tai-yeong Chung and published by . This book was released on 1990 with total page 116 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Essays on Commitment Renegotiation and Incompleteness of Contracts written by Ilya R. Segal and published by . This book was released on 1995 with total page 216 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Essays on Relational Contracts written by Marina Cynthia Halac and published by . This book was released on 2009 with total page 322 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Essays on Financial Contracting written by Jukka Vauhkonen and published by . This book was released on 2005 with total page 148 pages. Available in PDF, EPUB and Kindle. Book excerpt: Tiivistelmä.
Download or read book Three Essays on Renegotiation in Games written by Andreas Blume and published by . This book was released on 1989 with total page 292 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Essays in Contract Theory written by Fei-Lung Tzang and published by . This book was released on 2008 with total page 292 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Three Essays on Contract Renegotiation written by Hojin Jung and published by . This book was released on 2014 with total page 218 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Essays in Optimal Contracting Under Asymmetric Information written by Aaron Miruri Thegeya and published by . This book was released on 2010 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Essays in Optimal Contracting Under Asymmetric Information written by Aaron Miruri Thegeya and published by . This book was released on 2010 with total page 438 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Three Essays in Contract Theory written by Kyoungwon Rhee and published by . This book was released on 2000 with total page 144 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Essays on Optimal Contract Design written by Jin Xu and published by . This book was released on 2013 with total page 136 pages. Available in PDF, EPUB and Kindle. Book excerpt: The optimal compensation contract is a very important issue for firms. Some empirical findings of wage structure in internal labor market are puzzling. For example, why are the compensation of workers more compressed than predicted by the classical theories. Why is the wage structure convex in hierarchical firms? This dissertation explores various important factors which may affect the optimal contract in the internal labor market. The first chapter characterizes the optimal contract when workers in the workplace care not only about theirown wage but alos their co-workers' wage. Specifically, I assume that workers are inequity averse model of Fehr and Schmidt (1999), I derive that the optimal wage structure is more compressed with inequity averse workers than with the standard workers. Inequity aversion among workers can also help explain the internal organization of the firms. For example, inequity aversion among workers may lead firms to employ only high productivity workers, even though the marginal product of a low productivity worker is higher than the worker's marginal cost. Chapter 2 examines two possibile realistic explanations for the convex wage structure in the hierarchical firms. Based on the multi-round tournament model of Rosen (1986), we incorporate heterogeneous stage effects. The first extension that can generate the convex wage structure is that the number of workers competing increases with the hierarchical levels. The second explanation is that the returns to effort increase with the hierarchical levels, which cannot generate the convex wage structure unless further assumptions added on optimal effort levels and cost functions. The third chapter investigates the underlying assumption in Chapter 1 that people are inequity averse to ex-ante payoff differentials. Specifically, an online survey is conducted to test whether ex ante or ex post fairness views affect people's decision making in a social context. I find that the ex post fairness views do make an important role in people's decision making. The results of the survey data do not support the model of inequity aversion.
Download or read book Essays on Optimal Contracting written by Zhiguo He and published by . This book was released on 2008 with total page 154 pages. Available in PDF, EPUB and Kindle. Book excerpt:
