Download or read book Three Essays on Empirical Applications of Contract Theory written by Hsin-Yu Tseng and published by . This book was released on 2006 with total page 262 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Three Essays on Contract Theory and Applications written by Sunjoo Hwang and published by . This book was released on 2015 with total page 286 pages. Available in PDF, EPUB and Kindle. Book excerpt: This dissertation consists of three essays. The first essay examines a general theory of information based on informal contracting. The measurement problem--the disparity of true and measured performances--is at the core of many failures in incentive systems. Informal contracting can be a potential solution since, unlike in formal contracting, it can utilize a lot of qualitative and informative signals. However, informal contracting must be self-enforced. Given this trade-off between informativeness and self-enforcement, I show that a new source of statistical information is economically valuable in informal con- tracting if and only if it is sufficiently informative that it refines the existing pass/fail criterion. I also find that a new information is more likely valuable, as the stock of existing information is large. This information theory has implications on the measurement problem, a puzzle of relative performance evaluation and human resources management. I also provide a methodological contribution. For tractable analysis, the first-order approach (FOA) should be employed. Existing FOA-justifying conditions (e.g. the Mirrlees-Rogerson condition) are so strong that the information ranking condition can be applied only to a small set of information structures. Instead, I find a weak FOA- justifying condition, which holds in many prominent examples (with multi- variate normal or some of univariate exponential family distributions). The second essay analyzes the effectiveness of managerial punishments in mitigating moral hazard problem of government bailouts. Government bailouts of systemically important financial or industrial firms are necessary ex-post but cause moral hazard ex-ante. A seemingly perfect solution to this time-inconsistency problem is saving a firm while punishing its manager. I show that this idea does not necessarily work if ownership and management are separated. In this case, the shareholder(s) of the firm has to motivate the manager by using incentive contracts. Managerial punishments (such as Obama's $500,000 bonus cap) could distort the incentive-contracting program. The shareholder's ability to motivate the manager could then be reduced and thereby moral hazard could be exacerbated depending on corporate governance structures and punishment measures, which means the likelihood of future bailouts increases. As an alternative, I discuss the effectiveness of shareholder punishments. The third essay analyzes how education affect workers' career-concerns. A person's life consists of two important stages: the first stage as a student and the second stage as a worker. In order to address how a person chooses an education-career path, I examine an integrated model of education and career-concerns. In the first part, I analyze the welfare effect of education. In Spence's job market signaling model, education as a sorting device improves efficiency by mitigating the lemon market problem. In my integrated model, by contrast, education as a sorting device can be detrimental to social welfare, as it eliminates the work incentive generated by career-concerns. In this regard, I suggest scholarship programs aimed at building human capital rather than sorting students. The second part provides a new perspective on education: education is job-risk hedging device (as well as human capital enhancing or sorting device). I show that highly risk-averse people take high education in order to hedge job-risk and pursue safe but medium-return work path. In contrast, lowly risk-averse people take low education, bear job-risk, and pursue high-risk high-return work path. This explains why some people finish college early and begin start-ups, whereas others take master's or Ph.D. degrees and find safe but stable jobs.

Download or read book Three Essays in Contract Theory written by Bernard Caillaud and published by . This book was released on 1988 with total page 432 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Essays on Contract Design and Incentive Provision written by Eva I. Hoppe-Fischer and published by Springer. This book was released on 2019-02-19 with total page 211 pages. Available in PDF, EPUB and Kindle. Book excerpt: Contract theory, which emphasizes the importance of unverifiable actions and private information, has been a highly active field of research in microeconomics in the last decades. This thesis is divided into two parts. Part I consists of three chapters that study contract-theoretic models which are motivated by the classic procurement problem of a principal who wants an agent to deliver a certain good or service. In such models it is typically assumed that decision makers are interested in their own monetary payoffs only. Moreover, they have unlimited cognitive abilities and behave in a perfectly rational way. Yet, in practice people often do not behave this way. While empirical research is very difficult in contract theory, laboratory experiments have recently turned out to be an important source of data. In Part II, three experimental studies are presented that investigate contract-theoretic problems brought up in Part I.

Download or read book Three Essays on Bargaining and Contract Theory written by Martina Nikolaeva Gogova and published by . This book was released on 2014 with total page 171 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Three Essays in the Theory of Contracts and Organizations written by Fausto Panunzi and published by . This book was released on 1995 with total page 234 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Three Essays on Contract Theory written by and published by . This book was released on 2002 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Essays on Experimental Economics and Behavioral Contract Theory written by Stephen Leider and published by . This book was released on 2009 with total page 374 pages. Available in PDF, EPUB and Kindle. Book excerpt: This dissertation consists of three essays using experiments and theory to apply behavioral insights to questions of contract theory and organizational economics. The first essay (co-authored with Judd Kessler) argues that an important aspect of incomplete contracts is their role in establishing a norm for the transaction or relationship, which increases the efficiency of agents' actions. We demonstrate experimentally that unenforceable handshake agreements within a contract can substantially increase the efficiency of subjects' actions, particularly in games with strategic complements. When there is a handshake agreement, adding an additional enforceable clause to the contract often does not further increase efficiency in our experiment. The second essay (co-authored with Florian Englmaier) analyzes a principal-agent setting where the agent has reciprocity preferences (the intrinsic desire to repay generosity). We identify the optimal contract, which typically includes both monetary performance-pay incentives as well as excess rents to induce gift exchange incentives. We then identify several organizational characteristics that can enhance or diminish the efficacy of reciprocity-based incentives. In the third essay (co-authored with Florian Englmaier) we test experimentally a key prediction of our general theory: the value to the principal of the agent's output (relative to the effort cost) should influence the agent's willingness to reciprocate generous wage contracts. Our results confirm this prediction, as well as providing additional evidence that agent's effort decisions are motivated by reciprocity.

Download or read book The Theory of Contract Law written by Peter Benson and published by Cambridge University Press. This book was released on 2001-02-05 with total page 365 pages. Available in PDF, EPUB and Kindle. Book excerpt: Essays addressing a variety of issues in the theory and practice of contract law.

Download or read book Three Essays on the Theory of Contracts written by Chunto Tso and published by . This book was released on 1996 with total page 94 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Essays on Contract Theory and Industrial Organization written by Zhuoran Lu and published by . This book was released on 2018 with total page 150 pages. Available in PDF, EPUB and Kindle. Book excerpt: This dissertation consists of three essays on contract theory and industrial organization. The first chapter studies a signaling model in which a strategic player determines the cost structure of signaling. A principal chooses a price schedule for a product, and an agent with a hidden type chooses how much to purchase as a signal to the market. When the market observes the price schedule, the principal charges monopoly prices, and the agent purchases less than the first-best. In contrast, when the market does not observe the price schedule, the principal charges lower prices, and the agent purchases more than in the observed case; those of the highest types purchase more than the first-best. In terms of payoffs, the principal gains lower profits, whereas the agent obtains higher utility than in the observed case. When the intensity of signaling activity is sufficiently high, the observed case yields higher social welfare than the unobserved case. The model can be applied to schools choosing tuition, retailers selling luxury goods and media companies selling advertising messages. The second chapter studies nonlinear pricing for horizontally differentiated products that provide signaling values to consumers with private information, who choose how much to purchase as a signal to the receivers. I characterize the optimal symmetric price schedules under different market structures. Under monopoly, when the receivers observe the price schedule, the market is partially covered, and quantity is downward distorted if there is little horizontal differentiation. As the degree of horizontal differentiation rises, the market coverage rises, and the downward distortion decreases. When the degree is sufficiently high, for a certain level of signaling intensity, the monopolistic allocation achieves the first-best; for higher signaling intensities, quantity is upward distorted at the low end. In contrast, when the receivers do not observe the price schedule, the market is always partially covered, and the allocation is more dispersed than that in the observed case. Specifically, higher types purchase more than in the observed case, with the highest types purchasing more than the first-best, whereas lower types purchase less than in the observed case, with more types excluded from the market. When the market structure changes from monopoly to duopoly, market competition results in a higher market coverage and larger quantities for both the observed and unobserved case. The third chapter analyzes a principal-agent model to study how the architecture of peer monitoring affects the optimal sequence for teamwork. The agents work on a joint project, each responsible for an individual task. The principal determines the sequence of executing tasks as well as the rewards upon success of the project, the probability of which depends on each agent's effort and ability, with the objective of inducing full effort with minimum rewards. Agents may observe one another's effort based on an exogenous network and the endogenous sequence. We focus on networks composed of stars, and find a simple algorithm to characterize the optimal sequence of task assignment. The optimal sequence reflects the trade-off between the magnitude and the coverage of reward reduction in incentive design. In a single star, less capable periphery agents precede their center while more capable ones succeed their center. In complex networks consisting of multiple stars, periphery agents precede their center early in the sequence but succeed their center late in the sequence. When the number of peripheries differ across stars, a "V-shape" emerges: agents in large stars are allocated towards both ends of the sequence, while those in small ones towards the middle.

Download or read book Three Essays on Contracts and Social Harm written by Rohan Pitchford and published by . This book was released on 1993 with total page 234 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Risky Business written by Liran Einav and published by Yale University Press. This book was released on 2023-01-31 with total page 280 pages. Available in PDF, EPUB and Kindle. Book excerpt: An engaging and accessible examination of what ails insurance markets--and what to do about it--by three leading economists "The authors . . . do a masterful job of explaining the intractable complexities created by this socially vital activity."--Martin Wolf, Financial Times, "Best Books of 2022: Economics" Why is dental insurance so crummy? Why is pet insurance so expensive? Why does your auto insurer ask for your credit score? The answer to these questions lies in understanding how insurance works. Unlike the market for other goods and services--for instance, a grocer who doesn't care who buys the store's broccoli or carrots--insurance providers are more careful in choosing their customers, because some are more expensive than others. Unraveling the mysteries of insurance markets, Liran Einav, Amy Finkelstein, and Ray Fisman explore such issues as why insurers want to know so much about us and whether we should let them obtain this information; why insurance entrepreneurs often fail (and some tricks that may help them succeed); and whether we'd be better off with government-mandated health insurance instead of letting businesses, customers, and markets decide who gets coverage and at what price. With insurance at the center of divisive debates about privacy, equity, and the appropriate role of government, this book offers clear explanations for some of the critical business and policy issues you've often wondered about, as well as for others you haven't yet considered.

Download or read book Three essays on venture capital contracting written by Ibolya Schindele and published by Rozenberg Publishers. This book was released on 2005 with total page 181 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Economic Analysis of Suicide Prevention written by Yasuyuki Sawada and published by Springer. This book was released on 2017-10-24 with total page 212 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book examines the causes and consequences of suicide from the perspective of economics. The approach here differs from those in medical, psychiatric, epidemiological, and sociological studies of suicide and is thus novel in a way that highlights the importance of economic and institutional settings in the problem of suicide. The authors argue that suicide imposes a tremendous economic cost on contemporary society in a variety of ways, requiring the government to develop an effective prevention strategy. An empirical analysis using data from Japan and other developed countries shows that natural disasters and economic crises increase suicide rates, while liberal government policies favorable to the poor can decrease them. Further, the types of effective prevention strategies in the context of railway/subway suicides, celebrity suicides, public awareness campaigns, and education using data primarily from Japan are revealed. This book ultimately contributes to an understanding of suicides and the development of evidence-based policy proposals. The Japanese version of this book won the 56th Nikkei Prize for Economics Books (Nikkei Keizai Tosho Bunka Award) in 2013. Yasuyuki Sawada is Chief Economist of the Asian Development Bank and Professor of Economics at The University of Tokyo. Michiko Ueda is Associate Professor in the Faculty of Political Science and Economics at Waseda University. Tetsuya Matsubayashi is Associate Professor of Osaka School of International Public Policy (OSIPP) at Osaka University.

Download or read book Essays on Contract Theory Applied to International Finance written by Philippe Auffret and published by . This book was released on 1998 with total page 256 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.