Sebastian Kranz

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We modify the principal-agent model with moral hazard by assuming that the agent is expectation-based loss averse according to K˝ oszegi and Rabin (2006, 2007). The optimal contract is a binary payment scheme even for a rich performance measure, where standard preferences predict a fully contingent contract. The logic is that, due to the stochastic(More)
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In this paper, we study infinitely repeated games with imperfect public monitoring and the possibility of monetary transfers. We develop an efficient algorithm to compute the set of pure strategy public perfect equilibrium payoffs for each discount factor. We also show how all equilibrium payoffs can be implemented with a simple class of stationary(More)
Temptation and self-control have received substantial attention in the theoretical economics literature. Recently, Fudenberg and Levine (2012) modeled behavior when a temptation is " persistent ". This type of temptation is ubiquitous, as it refers to any temptation that is present until one either gives in or makes a costly commitment decision to have it(More)
More often than not production processes are the joint endeavor of people having different abilities and productivities. Such production processes and the associated surplus production are often not fully transparent in the sense that the relative contributions of involved agents are blurred; either by lack of information about the actual performance of(More)
a r t i c l e i n f o JEL classification: C61 L11 L13 L71 Q31 Keywords: Metallurgical coal trade Market power Oligopoly Stackelberg Cournot This paper analyses whether prices and trade-flows in the international market for metallurgical coals were subject to non-competitive conduct in the period 2008 to 2010. To do so, I develop mathematical programming(More)