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This paper studies long-term contracts for experimentation in a principal-agent setting with adverse selection (pre-contractual hidden information) about the agent's ability, dynamic moral hazard, and private learning about project quality. We show that profit max-imization by the principal generally leads to under-experimentation by an agent of low ability(More)
We consider an exchange economy in which a seller can trade an endowment of a divisible good whose quality she privately knows. Buyers compete in menus of non-exclusive contracts, so that the seller may choose to trade with several buyers. In this context, we show that an equilibrium always exists and that aggregate equilibrium allocations are generically(More)
This paper aims at reassessing some central issues of monetary policy by offering a model in which a central bank tries to stabilize fluctuations in aggregate output and inflation in an adaptive complex economy. We resort to evolutionary algorithms to model the central bank behaviour under discretion, and confront the efficiency of discretion with the(More)
In multiple-principal multiple-agent models of moral hazard, we provide sufficient conditions for the outcomes of pure-strategy equilibria in direct mechanisms to be preserved when principals can offer indirect communication schemes. The conditions include strong robustness in the direct mechanism game, as developed in the literature on competing mechanisms(More)
This paper studies the Rothschild and Stiglitz (1976) adverse selection environment, relaxing the assumption of exclusivity of insurance contracts. There are three types of agents that differ in their risk level, their riskiness is private information and known before any contract is signed. Agents can engage in multiple insurance contracts simultaneously ,(More)
A seller of a divisible good faces several identical buyers. The quality of the good may be low or high, and is the seller's private information. The seller has strictly convex preferences that satisfy a single-crossing property. Buyers compete by posting menus of nonexclusive contracts, so that the seller can simultaneously and privately trade with several(More)
This note presents a counterexample to Theorems 3 and 4 in Peters [3]. This note is an outcome of researches started when all the authors were working at CORE. Thus, we would like to thank all CORE people for their unique support. We also thank E. Campioni and M. Peters for their extremely useful comments on a previous draft of this work.
Compliance programs entail monitoring of employees' behavior with the claimed objective of fighting corporate crime. (Competition) Authorities promote such intra-firm monitoring. In a three-tier hierarchy model, authority-shareholder-manager, we study the impact of monitoring on contracting within the firm and the authority's optimal sanctions and leniency(More)
This paper provides a complete characterization of equilibria in a game-theoretic version of Rothschild & Stiglitz (1976)'s model of competitive insurance. I allow for stochastic contract offers by insurance firms and show that a unique symmetric equilibrium always exists. Exact conditions under which the equilibrium involves mixed strategies are provided.(More)