Browsing Department of Economics (ECO) by Subject "D82"

Now showing items 1-20 of 20

Title:Subjective performance evaluation of employees with biased beliefs Author(s):FOSCHI, Matteo; SANTOS-PINTO, Luís PedroDate:2017Type:Working PaperSeries/Number:EUI ECO; 2017/08Abstract:This paper analyses how worker optimism (and pessimism) affects subjective performance evaluation (SPE) contracts. We let an optimistic (pessimistic) worker overestimate (underestimate) the probability of observing an ...
Title:Characterization and uniqueness of equilibrium in competitive insurance Author(s):FARINHA LUZ, VitorDate:2015Type:Working PaperSeries/Number:EUI MWP; 2015/15Abstract:This paper provides a complete characterization of equilibria in a game-theoretic version of Rothschild and Stiglitz (1976)’s model of competitive insurance. I allow for stochastic contract offers by insurance firms and ...
Title:Group formation, in-group bias and the cost of cheating Author(s):MICHAELI, MotiDate:2015Type:Working PaperSeries/Number:EUI MWP; 2015/04Abstract:Group formation and in-group bias -- preferential treatment for insiders -- are widely observed social phenomena. This paper demonstrates how they arise naturally when people incur a psychological cost as the result of ...
Title:Car mechanics in the lab : investigating the behavior of real experts on experimental markets for credence goods Author(s):BECK, Adrian; KERSCHBAMER, Rudolf; QIU, Jianying; SUTTER, MatthiasDate:2014Type:Working PaperSeries/Number:EUI ECO; 2014/02Abstract:Credence goods, such as car repairs or medical services, are characterized by severe informational asymmetries between sellers and consumers, leading to fraud in the form of provision of insufficient service (undertreatment), ...
Title:Optimal income taxation with asset accumulation Author(s):ABRAHAM, Arpad; KOEHNE, Sebastian; PAVONI, NicolaDate:2014Type:Working PaperSeries/Number:EUI ECO; 2014/14Abstract:Several frictions restrict the government’s ability to tax assets. First, it is very costly to monitor trades on international asset markets. Second, agents can resort to nonobservable low-return assets such as cash, gold ...
Title:Continuous-time contracting with ambiguous information Author(s):DUMAV, Martin; RIEDEL, FrankDate:2014Type:Working PaperSeries/Number:EUI MWP; 2014/16Abstract:This study examines the contracting problem in continuous time with ambiguous information. A problem of this nature arises, for example, in an employment relationship where there is limited knowledge, or ambiguity, about ...
Title:Pundits and quacks : financial experts and market feedback Author(s):RUDIGER, Jesper; VIGIER, AdrienDate:2014Type:Working PaperSeries/Number:EUI MWP; 2014/22Abstract:By choosing whether or not to follow a financial expert’s advice, a privately informed trader implicitly screens the ability of this expert. We explore the performance of the resulting feedback mechanism. In the medium ...
Title:The hidden costs of tax evasion : collaborative tax evasion in markets for expert services Author(s):BALAFOUTAS, Loukas; BECK, Adrian; KERSCHBAMER, Rudolf; SUTTER, MatthiasDate:2014Type:Working PaperSeries/Number:EUI ECO; 2014/01Abstract:In markets where transactions are governed by contractual incompleteness, revealed intentions to evade taxes may affect market performance. We experimentally examine the impact of tax evasion attempts on the performance ...
Title:Cross-checking the media Author(s):RUDIGER, JesperDate:2013Type:Working PaperSeries/Number:EUI MWP; 2013/17Abstract:A characteristic of the news market is that consumers often cross-check information, i.e. observe several news outlets. At the same time, data on political media suggest that more partisan consumers are more likely to ...
Title:Efficiency, equity, and optimal income taxation Author(s):BRENDON, CharlesDate:2013Type:Working PaperSeries/Number:EUI MWP; 2013/22Abstract:Social insurance schemes must resolve a trade-off between competing efficiency and equity considerations. Yet there are few direct statements of this trade-off that could be used for practical policymaking. To this end, ...
Title:Second-degree moral hazard in a real-world credence goods market Author(s):BALAFOUTAS, Loukas; KERSCHBAMER, Rudolf; SUTTER, MatthiasDate:2013Type:Working PaperSeries/Number:EUI ECO; 2013/08Abstract:Empirical literature on moral hazard focuses exclusively on the direct impact of asymmetric information on market outcomes, thus ignoring possible repercussions. We present a field experiment in which we consider a phenomenon ...
Title:Financial Markets as a Commitment Device for the Government Author(s):SIMON, JennyDate:2012Type:Working PaperSeries/Number:EUI MWP; 2012/12Abstract:How does the presence of financial markets shape the government's ability to implement social redistribution? Individuals do not typically constrain consumption to equal their net-of-tax income every period. Instead, access ...
Title:Optimal Debt Bias in Corporate Income Taxation Author(s):SIMON, JennyDate:2012Type:Working PaperSeries/Number:EUI MWP; 2012/13Abstract:I present a rationale for a government to discriminate between debt and equity financing when taxing corporate income. For risk-averse entrepreneurs, equity generates more surplus than debt, because it provides financing ...
Title:Revenue Comparison in Asymmetric Auctions with Discrete Valuations Author(s):DONI, Nicola; MENICUCCI, DomenicoDate:2011-01-01Type:Working PaperSeries/Number:EUI ECO; 2011/27Abstract:We consider an asymmetric auction setting with two bidders such that the valuation of each bidder has a binary support. We prove that in this context the second price auction yields a higher expected revenue than the first ...
Title:Flexible Contracts Author(s):GOTTARDI, Piero; TALLON, Jean Marc; GHIRARDATO, PaoloDate:2011-01-01Type:Working PaperSeries/Number:EUI ECO; 2011/26Abstract:This paper studies the costs and benefits of delegating decisions to superiorly informed agents relative to the use of rigid, non discretionary contracts. The main focus of the paper lies in the analysis of the costs of ...
Title:Markets and Contracts Author(s):BISIN, Alberto; GEANAKOPOLS, John; GOTTARDI, Piero; MINELLI, Enrico; POLEMARCHAKIS, HeraklesDate:2010Type:Working PaperSeries/Number:EUI ECO; 2010/29Abstract:Economies with asymmetric information are encompassed by an extension of the model of general competitive equilibrium that does not require an explicit modeling of private information. Sellers have discretion over ...
Title:Flexible Contracts Author(s):GOTTARDI, Piero; TALLON, Jean Marc; GHIRARDATO, PaoloDate:2009Type:Working PaperSeries/Number:EUI ECO; 2009/34Abstract:This paper studies the costs and benefits of delegating decisions to superiorly informed agents relative to the use of rigid, non discretionary contracts. Delegation grants some flexibility in the choice of the action by ...
Title:Inventors and Impostors: An Economic Analysis of Patent Examination Author(s):SCHUETT, FlorianDate:2009Type:Working PaperSeries/Number:EUI ECO; 2009/28Abstract:The objective of patent examination is to separate the wheat from the chaff. Good applications - those satisfying the patentability criteria, particularly novelty and nonobviousness - should be accepted, while bad applications ...
Title:Asset Based Unemployment Insurance Author(s):RENDAHL, PontusDate:2007Type:Working PaperSeries/Number:EUI ECO; 2007/15Abstract:This paper studies a model of optimal redistribution policies in which agents face unemployment risk and in which savings may provide partial self-insurance. Moral hazard arises as job search effort is unobservable. The ...
Title:Does the Good Matter? Evidence on Moral Hazard and Adverse Selection from Consumer Credit Market Author(s):BICAKOVA, AlenaDate:2007Type:Working PaperSeries/Number:EUI ECO; 2007/02Abstract:Default rates on instalment loans vary with type of the good purchased. Using an Italian dataset of instalment loans between 1995-1999, we first show that the variation persists even after controlling for contract ...