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In a recent paper, Fack et al. (2019, American Economic Review) convincingly argue and theoretically demonstrate that there may be strong incentives for students to play non-truth-telling strategies when reporting preferences over schools, even when the celebrated deferred acceptance algorithm is employed. Their statistical test also rejects the (weak) truth-telling assumption in favour of another assumption, called stability, using a single data set on school choice in Paris. This paper uses Swedish school choice data and replicates their empirical finding in 52 of the 58 investigated data sets (P-value threshold 0.05).

Twitter is an outstanding social media platform that food firms are using to share information with consumers. This research aims to determine the behavior of different food retailers in Spain and the UK in relation to Twitter to shed light on their interests and similarities. This study collected and analyzed a total of 54,000 tweets from 17 food retailers from the social media platform Twitter. Analyzing food retailers’ generated content on Twitter by wordcount, content analysis and social network analysis, several characteristics were detected that could be relevant for suppliers of these food retailers. The output reveals differences among food retailers as well as groups with different strategies within each market and confirms the potential of Twitter data as an information source for conducting marketing studies. Similarly, we found that the adoption of Twitter data analytics by marketing managers of agrifood cooperatives could be very useful for advancing customer-centric strategies. Finally, this research presents its limitations and proposes new lines of future work., Twitter es una destacada plataforma de medios sociales utilizada ampliamente por las empresas alimentarias para compartir información con los consumidores. Este estudio tiene como objetivo determinar el comportamiento en Twitter de diferentes minoristas de alimentación que operan en España y el Reino Unido para arrojar luz sobre sus intereses y afinidades. El estudio recopiló y analizó un total de 54.000 tweets de las cuentas oficiales de Twitter de 17 minoristas de alimentación. Analizando el contenido generado por los minoristas de alimentación en Twitter con el recuento de palabras, el análisis de contenido generado por estos usuarios y el análisis de redes sociales, se detectaron algunas características que podrían ser relevantes para los proveedores de estos minoristas de alimentación. La identificación de las diferencias en la actividad y las comunicaciones en Twitter, así como también las afinidades entre algunos de ellos, confirman el potencial de los datos de Twitter como fuente de información para realizar estudios de marketing en general. Del mismo modo, descubrimos que la adopción de la analítica de datos de Twitter por los responsables de marketing de las cooperativas agroalimentarias podría ser muy útil para avanzar en las estrategias centradas en el cliente. Finalmente, la investigación presenta las limitaciones y propone nuevas líneas de trabajo futuro., Escuela de Estudios Cooperativos, Fac. de Ciencias Económicas y Empresariales, TRUE, pub

In a principal-agent model we analyze the firm’s decision to adopt an informal or a standardized Environmental Management System (EMS). Our results are consistent with empirical evidence in several respects. A standardized EMS increases the internal control at the cost of introducing some degree of rigidity that entails an endogenous setup cost. Standardized systems are more prone to be adopted by big and well established firms and under tougher environmental policies. Firms with standardized EMS tend to devote more effort to abatement although this effort results in lower pollution only if public incentives are strong enough, suggesting a complementarity relationship between standardized EMS and public policies. Emission charges have both a marginal effect on abatement and a qualitative effect on the adoption decision that may induce a conflict between private and public interests. As a result of the combination of these two effects it can be optimal for the government to distort the tax in a specific way in order to push the firm to choose the socially optimal EMS. The introduction of standardized systems can result in win-win situations where firms, society and the environment get better off., Ministerio de Ciencia e Innovación (MICINN), European Regional Development Fund (ERDF), Junta de Andalucía, Depto. de Análisis Económico y Economía Cuantitativa, Fac. de Ciencias Económicas y Empresariales, TRUE, pub

El presente trabajo propone un modelo teórico para identificar los canales por los cuales las fricciones de información, presentes en el mercado de titularización, pueden amplificar la respuesta de la oferta de crédito asociada a aumentos (o contracciones) en los precios de la vivienda. El modelo caracteriza los contratos de titularización óptimos, entre bancos e inversionistas, asumiendo que los bancos poseen información privada sobre la probabilidad de impago de las hipotecas que emiten. Estas fricciones de información entre bancos (vendedores) e inversionistas (compradores) generan un problema de selección adversa en el mercado. Los resultados cuantitativos muestran que la selección adversa en el mercado de titularización amplifica, de forma no lineal, fluctuaciones de la oferta de crédito ante choques exógenos en los precios de vivienda, costos de administración de cartera y diferencias en los retornos de las hipotecas. El modelo es informativo para el diseño de políticas destinadas a estabilizar la provisión de liquidez en el mercado de titularizaciones y en la oferta de crédito., This paper studies how information frictions in the securitization market amplify the response of mortgage credit supply to house price shocks. We model securitization as an optimal contracting problem between investors and banks. Banks are better informed than investors about the quality of the mortgages they originate, leading to an adverse selection problem. Investors use the quantity sold as a screening device to induce banks to reveal truthful information. We find that adverse selection amplifies the response of a bank’s mortgage originations to house price shocks. The degree of amplification is also a function of the technological differences in managing portfolios between banks and investors. The model has implications for the design of policy interventions aimed at stabilizing liquidity in the securitization market and credit provision to households in the credit market.

Purpose Previous literature posits that corporate governance and information asymmetry are the main factors in making efficient investments. Meanwhile, a growing body of studies is of the opinion that corporate governance can also mitigate the problem of information asymmetry and consequently exerts significant impacts on the association between information asymmetry and investment efficiency. This study aims to analyze the impact of corporate governance and information asymmetry on investment efficiency. It also tests the moderating role of corporate governance in the relationship between information asymmetry and investment efficiency. Design/methodology/approach The sample consists of 4,082 firms domiciled in 20 developed countries over the years from 2003 to 2019, including 33,812 firm-year observations. The bid–ask spread is used as a proxy for information asymmetry. To measure corporate governance performance, a proxy provided by ASSET4 is employed, and to determine the optimal levels of investments, we relied on the growth opportunity. To estimate the models, ordinary least squares and generalized method of moment are used. Findings The results reveal that information asymmetry is inversely related to investment efficiency, and, corporate governance mitigates this negative association. Originality/value This paper sheds light on the role of corporate governance in firms as a lever for mitigating information asymmetry and tries out information asymmetry and agency theories in relation to the impact of information asymmetry on investment efficiency. It also confirms the theory stating that corporate governance can be considered as a determinant of investment efficiency.

A novel laboratory experiment is used to show that mismatching between task preferences and task assignment strongly undermines worker performance and leads to free riding in teams. Unlike prior experiments using real effort tasks, task preferences are elicited from all workers. Under team-based remuneration (revenue sharing), free riding is significant, but this effect is largely driven by those working on undesired tasks. Workers’ endogenous sorting into tasks improves productivity as it mitigates task mismatching although workers’ task selection per se has only small effects on work performance and effort provisions beyond the positive sorting effects., A novel laboratory experiment is used to show that mismatching between task preferences and task assignment undermines worker productivity and leads to free riding in teams. We elicit task preferences from all workers. Workers’ endogenous sorting into tasks significantly improves productivity under individual-based remuneration (performance pay). Under team-based remuneration (revenue sharing), free riding is significant, but almost exclusively among those working on undesired tasks. Task selection by majority voting in teams alleviates free riding, but only partly so, because some workers are still assigned to undesired tasks. Our findings have broad implications for research using real effort tasks.

CRUE-CSIC (Acuerdos Transformativos 2022), In this paper, we use several indicators of trade informativeness to search for informed traders on the final trading days of Banco Popular, the first and only bank resolution case to date in the euro area. In particular, we use the model proposed by Preve and Tse (2013) to estimate the adjusted daily probability of informed trading and the probability of symmetric order-flow shock using high-frequency transaction data. Our empirical results indicate that upon the anticipation of a possible liquidation of the bank, informed investors reacted to the bad news by placing more weight on it and that Banco Popular experienced large increases in both buy- and sell-orders during the last days of trading when the bank registered a significant depletion of its deposit base. Moreover, we find evidence supporting the presence of inside trading and illiquidity, especially after speculation in the media that the bank could face a liquidation. Our study has important implications for market participants and regulatory authorities., Ministerio de Ciencia e Innovación (MICINN), Depto. de Análisis Económico y Economía Cuantitativa, Fac. de Ciencias Económicas y Empresariales, TRUE, pub

We investigate menu mechanisms: dynamic mechanisms where at each history, an agent selects from a menu of his possible assignments. We consider both ex-post implementation and full implementation for a strengthening of dominance that covers off-path histories, and provide conditions under which menu mechanisms provide these implementations of rules. Our results cover a variety of environments, including matching with contracts, labor markets, auctions, school choice, marriage, object allocation, and elections.

Heterogeneously informed agents decide their optimal action timings while observing past activities over time. We construct such a dynamic global coordination game to investigate the impact of learning and delay options on coordination behaviors and outcomes. A unique monotone equilibrium is characterized, which is analytically convenient for all ranges of learning efficiencies, and we demonstrate that learning improves coordination success, while the delay options alone have no impact, relative to the one-shot game. Dynamics of agents' behaviors and welfare implications are then presented. In addition, we show that full learning about the state achieves in the limit, and find the condition on which observing actions reveals more accurate information about the state than directly observing it.

This study explores the reciprocal effects between agency problems and market competition. We develop an adverse selection model of a competing conglomerate with production constraints. The conglomerate participates as the leader in two different duopolistic markets with a Stackelberg-Cournot framework and heterogeneous goods. The conglomerate is run by its headquarters and two division managers. The agency problem arises because the market demand size is a manager's private information, which the headquarters try to elicit by a contract mechanism. We fully characterize a first and a second-best contract. When the production constraints make the first best outcome unattainable, the second-best contract is either separating or pooling, depending on the severity of the constraints. The separating second-best contract sometimes improves the ex-ante welfare in comparison to a symmetric information benchmark. The pooling second-best contract never improves the ex-ante welfare. We also find that at an intermediate level of substitutability, the second-best contract is most likely to coincide with the first-best one, and any departure from that level toward either substitutability or complementarity makes the attainment of the first-best outcome less likely.

We compare two widely used allocation methods for assigning students to schools-the deferred acceptance (DA) mechanism and the Boston mechanism-in terms of students' welfare under a symmetric incomplete information setting in which each student's school preferences are privately known. We assume that each student's type, which is the vector of cardinal values they derive from attending each school, is independently drawn, and each possible strict ranking of schools is equally likely for each student. Furthermore, all schools have an identical student priority order, which is unknown to students. When there are three schools with equal numbers of available seats, we analytically derive the probability difference between the Boston and DA mechanisms of obtaining the first, second, and third choices. Furthermore, we show that the Boston mechanism is ex-ante welfare superior to the DA mechanism under weak conditions on the distribution of valuations when each student's value for each school is independently drawn from an identical distribution.

We compare two widely used allocation methods for assigning students to schools-the deferred acceptance (DA) mechanism and the Boston mechanism-in terms of students' welfare under a symmetric incomplete information setting in which each student's school preferences are privately known. We assume that each student's type, which is the vector of cardinal values they derive from attending each school, is independently drawn, and each possible strict ranking of schools is equally likely for each student. Furthermore, all schools have an identical student priority order, which is unknown to students. When there are three schools with equal numbers of available seats, we analytically derive the probability difference between the Boston and DA mechanisms of obtaining the first, second, and third choices. Furthermore, we show that the Boston mechanism is ex-ante welfare superior to the DA mechanism under weak conditions on the distribution of valuations when each student's value for each school is independently drawn from an identical distribution.

Este trabajo desarrolla un modelo macroecómico del sistema financiero inmobiliario de Estados Unidos. El modelo conecta las dinámicas del mercado de crédito hipotecario y las del mercado de titularización de bonos hipotecarios en equilibrio general. La titularización hipotecaria emerge de manera endógena como una tecnología eficiente para transferir activos ilíquidos entre agentes y canalizar mayor liquidez hacia la provisión de crédito hipotecario, reduciendo de esta manera costos de intermediación y los tipos de interés hipotecarios. Sin embargo, estos beneficios se ven disminuidos por la información privada que poseen los bancos emisores de hipotecas sobre la probabilidad de impago de los hogares prestatarios, lo que genera un problema de selección adversa en el mercado de titularización hipotecaria. En el modelo, fluctuaciones en el riesgo crediticio de los hogares conllevan fluctuaciones en la provisión de crédito hipotecario a través del canal de liquidez de titularización. El problema de selección adversa genera un efecto multiplicador que amplifica los choques financieros que experimentan los hogares. Como aplicación, el presente trabajo cuantifica que las fricciones de información multiplicaron 1,5 veces la contracción de crédito observada durante la Gran Crisis Financiera en el mercado hipotecario estadounidense. Una política de subsidios en el mercado de titularización puede estabilizar la liquidez y los ciclos de crédito hipotecario. Sin embargo, esta política genera niveles ineficientemente altos de liquidez y pequeñas ganancias de bienestar a los hogares., I develop a macro model of the U.S. housing finance system that delivers an equilibrium connection between the securitization and mortgage credit markets. An endogenous securitization market efficiently reallocates illiquid assets, increases liquidity to fund mortgage lending, and lowers interest rates for borrowers. However, its benefits are hindered by originators’ private information about loan quality which leads to adverse selection in securitization. Fluctuations in household credit risk induce expansion and contractions of mortgage credit through the securitization liquidity channel. Adverse selection generates a multiplier effect of household shocks. Applying the theory to the Great Financial Crisis, I quantify that information frictions amplified the observed mortgage credit contraction by a factor of 1.5. The multiplier is an endogenous function of the severity of information frictions. A subsidy policy in the securitization market can stabilize liquidity and credit cycles. However, the policy generates inefficiently high liquidity and fails to realize meaningful welfare gains for households.

A classic trade-off that school districts face when deciding which matching algorithm to use is that it is not possible to always respect both priorities and preferences. The student-proposing deferred acceptance algorithm (DA) respects priorities but can lead to inefficient allocations. The top trading cycle algorithm (TTC) respects preferences but may violate priorities. We identify a new condition on school choice markets under which DA is efficient and there is a unique allocation that respects priorities. Our condition generalizes earlier conditions by placing restrictions on how preferences and priorities relate to one another only on the parts that are relevant for the assignment. We discuss how our condition sheds light on existing empirical findings. We show through simulations that our condition significantly expands the range of known environments for which DA is efficient., info:eu-repo/semantics/published

As an unobservable attribute, food safety is likely to be under-provided by markets where regulatory enforcement is weak. In such settings, stimulating consumer demand for safer food can potentially encourage market actors to invest in food safety. Through a randomized trial in Kenya, we test the impact of informing consumers about which maize flour brands are most likely to comply with the regulatory standard for aflatoxin, a carcinogenic fungal byproduct. Providing information on safer brands alone does not significantly affect consumption behavior. However, when the same information is combined with a test performed on the maize flour stocked by the household, the likelihood that a safer brand is consumed 2 months later is 76% higher than in the comparison group. Our findings suggest that providing information on the relative riskiness of substitute foods could encourage consumers to make safer choices.

In the standard herding model, privately informed individuals sequentially see prior actions and then act. An identical action herd eventually starts and public beliefs tend to "cascade sets"where social learning stops. What behaviour is socially efficient when actions ignore informational externalities? We characterize the outcome that maximizes the discounted sum of utilities. Our four key findings are: (1) cascade sets shrink but do not vanish, and herding should occur but less readily as greater weight is attached to posterity. (2) An optimal mechanism rewards individuals mimicked by their successor. (3) Cascades cannot start after period one under a signal log-concavity condition. (4) Given this condition, efficient behaviour is contrarian, leaning against the myopically more popular actions in every period. We make two technical contributions: As value functions with learning are not smooth, we use monotone comparative statics under uncertainty to deduce optimal dynamic behaviour. We also adapt dynamic pivot mechanisms to Bayesian learning.

In the standard herding model, privately informed individuals sequentially see prior actions and then act. An identical action herd eventually starts and public beliefs tend to "cascade sets"where social learning stops. What behaviour is socially efficient when actions ignore informational externalities? We characterize the outcome that maximizes the discounted sum of utilities. Our four key findings are: (1) cascade sets shrink but do not vanish, and herding should occur but less readily as greater weight is attached to posterity. (2) An optimal mechanism rewards individuals mimicked by their successor. (3) Cascades cannot start after period one under a signal log-concavity condition. (4) Given this condition, efficient behaviour is contrarian, leaning against the myopically more popular actions in every period. We make two technical contributions: As value functions with learning are not smooth, we use monotone comparative statics under uncertainty to deduce optimal dynamic behaviour. We also adapt dynamic pivot mechanisms to Bayesian learning.

We assess the effect of credit information sharing on bank stability for a sample of 161 banks located in 30 Sub-Saharan African (SSA) countries over 2004-2014. We find that banks become more stable as the quality of credit information sharing institutions improves. Moreover, despite foreign banks having an informational disadvantage with respect to domestic banks due to distance-related information frictions, and hence the assumption that they would benefit more from credit information sharing, the results indicate that both types of banks are affected in the same way. This suggests that foreign banks rely on alternative strategies to compensate for their informational disadvantage in local markets., info:eu-repo/semantics/published

We study learning in a decentralized pairwise adverse selection economy, where buyers have access to the quality of traded goods but not to the quality of non- traded goods. Buyers categorize ask prices in order to predict quality as a function of ask price. The categorization is endogenously determined so that outcomes that are observed more often are categorized more finely, and within each category beliefs reflect the empirical average. This leads buyers to have a very fine understanding of the relationship between qualities and ask prices for prices below the current market price, but only a coarse understanding above that price. We find that this induces a price cycle involving the Nash equilibrium price, and one or more higher prices.

We analyze a divisible good uniform-price auction that features two groups, each with a finite number of identical bidders, who compete in demand schedules. In the linear-quadratic-normal framework, this paper presents conditions under which the unique equilibrium in linear demands exists and derives novel comparative statics results that highlight the interaction between payoff and information parameters with asymmetric groups. We find that the strategic complementarity in the slopes of traders' demands is reinforced by inference effects from prices, and we display the role of payoff and information asymmetries in explaining deadweight losses. Furthermore, price impact and the deadweight loss need not move together, and market integration may reduce welfare. The results are consistent with the available empirical evidence. Copyright © 2021 The Authors.

Is inequality good or bad for innovation? I study an endogenous growth model with heterogeneous agents; due to credit frictions, inequalities in wealth lead to misallocation of talent. A more unequal reward scheme incentivises innovation in any given period, but it leads to a more unequal distribution of opportunities that may exacerbate the misallocation of talent in the next period. Empirically, I show that the flow of patents in a US state is negatively correlated with inequality of opportunity, but positively with inequality of effort; and that the elimination of state death taxes, as a proxy for an increase in the financial incentives towards risky activities, had a positive short-term but a negative longterm effect on the growth rate of patents.

Is inequality good or bad for innovation? I study an endogenous growth model with heterogeneous agents; due to credit frictions, inequalities in wealth lead to misallocation of talent. A more unequal reward scheme incentivises innovation in any given period, but it leads to a more unequal distribution of opportunities that may exacerbate the misallocation of talent in the next period. Empirically, I show that the flow of patents in a US state is negatively correlated with inequality of opportunity, but positively with inequality of effort; and that the elimination of state death taxes, as a proxy for an increase in the financial incentives towards risky activities, had a positive short-term but a negative longterm effect on the growth rate of patents.

Is inequality good or bad for innovation? I study an endogenous growth model with heterogeneous agents; due to credit frictions, inequalities in wealth lead to misallocation of talent. A more unequal reward scheme incentivises innovation in any given period, but it leads to a more unequal distribution of opportunities that may exacerbate the misallocation of talent in the next period. Empirically, I show that the flow of patents in a US state is negatively correlated with inequality of opportunity, but positively with inequality of effort; and that the elimination of state death taxes, as a proxy for an increase in the financial incentives towards risky activities, had a positive short-term but a negative longterm effect on the growth rate of patents.

This paper explores a model of dynamic signaling without commitment. It is known that separating equilibria do not exist if the sender cannot commit to future costly actions, since no single action can have enough weight to be an effective signal. This paper, however, shows that informative and payoff-relevant signaling can occur even without commitment and without resorting to unreasonable off-path beliefs. Such signaling can only happen through attrition, when the weakest type mixes between revealing own type and pooling with the stronger types. The possibility of full information revelation in the limit hence depends crucially on the assumptions about the state space. We illustrate the results by exploring a model of dynamic price signaling and show that prices may be informative of product quality even if the seller cannot commit to future prices, with both high and low prices being able to signal high quality., This paper explores a model of dynamic signaling without commitment. It is known that separating equilibria do not exist if the sender cannot commit to future costly actions, since no single action can have enough weight to be an effective signal. This paper, however, shows that informative and payoff-relevant signaling can occur even without commitment and without resorting to unreasonable off-path beliefs. Such signaling can only happen through attrition, when the weakest type mixes between revealing own type and pooling with the stronger types. The possibility of full information revelation in the limit hence depends crucially on the assumptions about the state space. We illustrate the results by exploring a model of dynamic price signaling and show that prices may be informative of product quality even if the seller cannot commit to future prices, with both high and low prices being able to signal high quality.

Approval committees selecting candidates or certifying products often base their decisions on a mixture of information, some of which is voluntarily disclosed by applicants, and some which they acquire first-hand, by way of tests or otherwise. We examine the interplay between approvers' first-hand information acquisition and applicants' voluntary disclosure. We show that access to cheaper or more accurate information on the part of approvers might impair disclosure by applicants, resulting in overall lower social welfare and quality of certification. In such cases, the commitment of approvers to simple testing rules can play an important role towards improving social welfare.

In France, private firms manage the majority of water services but there is still a large part of water services under direct management. Such a diversity of governance forms allows for efficiency and quality benchmarking between direct and delegated management, and raises questions about the determinants of the choice of the local government to manage or delegate, and to switch from a governance model to the other. This paper reviews the literature on these issues in France. Moreover, the paper identifies several hot issues deserving further research such as scale and scope economics, and the implementation of social tariffs or increasing block tariffs.

In France, private firms manage the majority of water services but there is still a large part of water services under direct management. Such a diversity of governance forms allows for efficiency and quality benchmarking between direct and delegated management, and raises questions about the determinants of the choice of the local government to manage or delegate, and to switch from a governance model to the other. This paper reviews the literature on these issues in France. Moreover, the paper identifies several hot issues deserving further research such as scale and scope economics, and the implementation of social tariffs or increasing block tariffs.

In France, private firms manage the majority of water services but there is still a large part of water services under direct management. Such a diversity of governance forms allows for efficiency and quality benchmarking between direct and delegated management, and raises questions about the determinants of the choice of the local government to manage or delegate, and to switch from a governance model to the other. This paper reviews the literature on these issues in France. Moreover, the paper identifies several hot issues deserving further research such as scale and scope economics, and the implementation of social tariffs or increasing block tariffs.

We explore costly deliberation by two differentially informed and possibly biased jurors: A hawk Lones and a dove Moritz alternately insist on a verdict until one concedes. Debate assumes one of two genres, depending on bias: A juror, say Lones, is intransigent if he wishes to prevail and reach a conviction for any type of Moritz next to concede. In contrast, Lones is ambivalent if he wants the strongest conceding types of Moritz to push for acquittal. Both jurors are ambivalent with small bias or high delay costs. As Lones grows more hawkish, he argues more forcefully for convictions, mitigating wrongful acquittals. If dovish Moritz is intransigent, then he softens (strategic substitutes), leading to more wrongful convictions. Ambivalent debate is new, and yields a novel dynamic benefit of increased polarization. For if Moritz is ambivalent, then he toughens (strategic complements), and so, surprisingly, a more hawkish Lones leads to fewer wrongful acquittals and convictions. So more polarized but balanced debate can improve communication, unlike in static cheap talk. We also show that patient and not too biased jurors vote against their posteriors near the end of the debate, optimally playing devil’s advocate. We shed light on the adversarial legal system, peremptory challenges, and cloture rules.

We model a monopoly insurance market where consumers can learn their accident risks at a cost c. We then ask: What are the welfare effects of a policy that reduces c? If c is sufficiently small (c < c*), the optimal contract is such that the consumer gathers information. For c < c*, both insurer and consumer benefit from a policy that reduces c further. For c > c*, marginally reducing c hurts the insurer and weakly benefits the consumer. Finally, a reduction in c that is “successful,” meaning that the consumer gathers information after the reduction but not before it, can hurt both parties.

Two notions of stability, ex ante stability and Bayesian stability, are investigated in a matching model with non-transferrable utility, interdependent preferences, and one-sided incomplete information. Ex ante stable matching-outcomes are unblocked for every belief on the blocking partner's type while Bayesian stable matching-outcomes are unblocked with respect to prior beliefs. Ex ante stability is a minimal requirement. Bayesian stability is a more selective desideratum with sound efficiency properties.

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 acceptable performance. The firm is better informed about performance than the worker and knows the worker's bias. We show that optimism (and pessimism): i) changes the optimal incentive scheme under SPE, ii) lowers the deadweight loss associated with SPE contracts, iii) can lead to a Pareto improvement by simultaneously lowering the firm's expected wage cost and raising the worker's expected compensation. In addition, we show that worker pessimism can lead to SPE contracts without a deadweight loss, in contrast to the standard case in the literature.

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 acceptable performance. The firm is better informed about performance than the worker and knows the worker's bias. We show that optimism (and pessimism): i) changes the optimal incentive scheme under SPE, ii) lowers the deadweight loss associated with SPE contracts, iii) can lead to a Pareto improvement by simultaneously lowering the firm's expected wage cost and raising the worker's expected compensation. In addition, we show that worker pessimism can lead to SPE contracts without a deadweight loss, in contrast to the standard case in the literature.

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 acceptable performance. The firm is better informed about performance than the worker and knows the worker's bias. We show that optimism (and pessimism): i) changes the optimal incentive scheme under SPE, ii) lowers the deadweight loss associated with SPE contracts, iii) can lead to a Pareto improvement by simultaneously lowering the firm's expected wage cost and raising the worker's expected compensation. In addition, we show that worker pessimism can lead to SPE contracts without a deadweight loss, in contrast to the standard case in the literature.

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 acceptable performance. The firm is better informed about performance than the worker and knows the worker's bias. We show that optimism (and pessimism): i) changes the optimal incentive scheme under SPE, ii) lowers the deadweight loss associated with SPE contracts, iii) can lead to a Pareto improvement by simultaneously lowering the firm's expected wage cost and raising the worker's expected compensation. In addition, we show that worker pessimism can lead to SPE contracts without a deadweight loss, in contrast to the standard case in the literature.

This article studies the nature of the trade-off between incentives and enforcement mechanisms that an Armed Illegal Organization (AIO)'s leadership, which is the principal, offers to its operatives, who act as agents. This principal-agent model focuses on both the expected benefits and costs for those who decide to stay or defect from the armed organization, in an uncertain context in which desertion is encouraged by an external agent who is providing incentives aimed at fostering operatives' individual desertion. Given a parameterization of the model, we find the optimal transfer system using the constrained minimization routine fmincon in MATLAB's optimizations toolbox. Once we obtain a numerical version of the contract, we use the computational tool to simulate the behavior of agents who are facing the probability of being punished and how this could encourage agents to not make any effort., Este artículo estudia la naturaleza de la relación inversa entre incentivos y mecanismos de cumplimiento que la cúpula de una organización armada o principal ofrece a sus operativos, quienes actúan como agentes. El modelo de principal-agente se centra tanto en los costos y beneficios esperados de aquellos que deciden permanecer o desertar de la organización armada, en un contexto en el que la deserción es alentada por un agente externo que provee los incentivos para fomentar la deserción individual. Dada una parametrización específica del modelo, un sistema de transferencias óptimo es hallado usando la rutina de minimización con restricciones fmincon de la caja de herramientas de MATLAB. Una vez obtenida esa versión numérica del contrato, se utiliza la herramienta computacional para simular el comportamiento de los agentes que enfrentan la probabilidad de ser castigados y cómo eso podría alentarlos a no hacer ningún tipo de esfuerzo., Este artigo estuda a natureza da relação inversa entre incentivos e mecanismos de cumprimento que a cúpula de uma organização armada ou principal, oferece a seus operativos, os quais agem como agentes. O modelo de principal-agente se centra tanto nos custos e benefícios esperados daqueles que decidem permanecer ou desertar da organização armada, em um contexto no qual a deserção é estimulada por um agente externo, que dá os incentivos para fomentar a deserção individual. Dada uma parametrização específica do modelo, um sistema de transferências ótimo é achado usando a rotina de minimização com restrições fmincon da caixa de ferramentas de MATLAB. Uma vez obtida essa versão numérica do contrato, é utilizada a ferramenta computacional para simular o comportamento dos agentes que enfrentam a probabilidade de serem punidos e como isso poderia levá-los a não fazer nenhum tipo de esforço.

Two notions of stability, ex ante stability and Bayesian stability, are investigated in a matching model with non-transferrable utility, interdependent preferences, and one-sided incomplete information. Ex ante stable matching-outcomes are unblocked for every belief on the blocking partner's type while Bayesian stable matching-outcomes are unblocked with respect to prior beliefs. Ex ante stability is a minimal requirement. Bayesian stability is a more selective desideratum with sound efficiency properties.

We investigate the impact of conflicts of interests on randomised controlled trials in a game-theoretic framework. A researcher seeks to persuade an evaluator that the causal effect of a treatment outweighs its cost, to justify acceptance. The researcher can use private information to manipulate the experiment in three alternative ways: (i) sampling subjects based on their treatment effect, (ii) assigning subjects to treatment based on their baseline outcome, or (iii) selectively reporting experimental outcomes. The resulting biases have different welfare implications: for sufficiently high acceptance cost, in our binary illustration the evaluator loses in cases (i) and (iii) but benefits in case (ii).

We study information acquisition in dealer markets. We first identify a one-sided strategic complementarity in information acquisition: the more informed traders are, the larger market makers' gain from becoming informed. We then fully characterize the unique equilibrium as a function of the (uniform) cost of information, and the composition of the market in terms of liquidity traders and speculators. Lastly, we examine the implications of our analysis for market liquidity and price discovery. Our findings shed light on several empirical regularities.

This paper investigates China's centralized mortgage policy in general, and evaluates the policy change in 2011: the minimum down payment was dramatically raised to 60% of the home price. Using our previously developed structural model, we recover the unobserved liquidity wealth levels of individual borrowers. We provide quantitative evidence for the doubtful efficacy of the 2011 raise in the minimum down payment: it hurts the moderately-wealthy individuals, leaving them to struggle with high default risks, but doing little to prevent the rich from entering the market.

This paper investigates China's centralized mortgage policy in general, and evaluates the policy change in 2011: the minimum down payment was dramatically raised to 60% of the home price. Using our previously developed structural model, we recover the unobserved liquidity wealth levels of individual borrowers. We provide quantitative evidence for the doubtful efficacy of the 2011 raise in the minimum down payment: it hurts the moderately-wealthy individuals, leaving them to struggle with high default risks, but doing little to prevent the rich from entering the market.

Social banks screen loan applicants by using both social and financial criteria, and social screening implies an extra workload. To check the costs involved in this type of screening we use balance-sheet information on European banks, and compare the operating costs of social banks with those of other banks. Surprisingly, our first results suggest that social banks’ costs are not significantly higher than those of their mainstream counterparts. Next, we uncover that the extra costs of social screening are offset by a cheaper workforce. Despite their need for specific screening, social banks are financially sustainable in a market dominated by for-profit institutions., info:eu-repo/semantics/published

We investigate the impact of conflicts of interests on randomised controlled trials in a game-theoretic framework. A researcher seeks to persuade an evaluator that the causal effect of a treatment outweighs its cost, to justify acceptance. The researcher can use private information to manipulate the experiment in three alternative ways: (i) sampling subjects based on their treatment effect, (ii) assigning subjects to treatment based on their baseline outcome, or (iii) selectively reporting experimental outcomes. The resulting biases have different welfare implications: for sufficiently high acceptance cost, in our binary illustration the evaluator loses in cases (i) and (iii) but benefits in case (ii).

Energy performance certificates (EPC) can help solve information asymmetries between landlords and tenants about dwellings’ energy performance. EPCs may enable rent premiums for energy efficient dwellings, incentivizing energy efficiency investment in rental property. However, low EPC disclosure rates may undermine their potential to promote investment. Using a cross-sectional dataset of residential rental advertisements from Brussels, we estimate rent premiums from EPCs under de facto voluntary EPC disclosure. We use the Heckman correction and an instrumental variable approach to tackle potential selection bias and endogeneity. First, we find that highly energy-efficient compared to inefficient dwellings earn a rent premium, provided that EPCs are disclosed (energy efficiency effect). This premium may incentivize investment in energy efficiency of rental property. Second, dwellings with average energy performance are penalized from disclosing an EPC (information effect). This may provide a strategic motivation to hide EPCs that indicate mediocre energy performance., info:eu-repo/semantics/published

The success of both microcredit and micro-savings products rests upon simplicity and standardization in order to stimulate client discipline. Meanwhile, these products lack flexibility. This paper attempts to make sense of behavioral product design in microfinance. We focus on the potential trade-offs between discipline and flexibility. While discipline devices encourage clients make payments duly on time, flexibility improves clients’ day-to-day money management and helps them cope with shocks. Our contribution is twofold. First, we highlight the evidencebased advantages and disadvantages of flexible products in microfinance. Second, we present best-practice examples of flexible products offered bymicrofinance institutions worldwide., info:eu-repo/semantics/published

El propósito del estudio es identificar las capacidades de absorción del conocimiento como fuente de ventajas competitivas que potencializan en las pymes las posibilidades de integrarse a las cadenas globales de valor. Para ello se realizó una revisión del estado del arte que fundamenta la propuesta de un modelo basado en 2 enfoques teóricos: el de sistemas de innovación y el de cadenas globales de valor. La implementación se realizó en pymes del noroeste de México en los sectores de tecnologías de información y metalmecánica. Los resultados muestran que cuando las pymes locales son proveedoras de empresas transnacionales reciben transferencia de conocimientos que les permiten ingresar o mejorar su posición en las cadenas globales de valor.

El propósito del estudio es identificar las capacidades de absorción del conocimiento como fuente de ventajas competitivas que potencializan en las pymes las posibilidades de integrarse a las cadenas globales de valor. Para ello se realizó una revisión del estado del arte que fundamenta la propuesta de un modelo basado en 2 enfoques teóricos: el de sistemas de innovación y el de cadenas globales de valor. La implementación se realizó en pymes del noroeste de México en los sectores de tecnologías de información y metalmecánica. Los resultados muestran que cuando las pymes locales son proveedoras de empresas transnacionales reciben transferencia de conocimientos que les permiten ingresar o mejorar su posición en las cadenas globales de valor.

The success of both microcredit and micro-savings products rests upon simplicity and standardization in order to stimulate client discipline. Meanwhile, these products lack flexibility. This paper attempts to make sense of behavioral product design in microfinance. We focus on the potential trade-offs between discipline and flexibility. While discipline devices encourage clients make payments duly on time, flexibility improves clients’ day-to-day money management and helps them cope with shocks. Our contribution is twofold. First, we highlight the evidencebased advantages and disadvantages of flexible products in microfinance. Second, we present best-practice examples of flexible products offered bymicrofinance institutions worldwide., info:eu-repo/semantics/published

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 show that a unique symmetric equilibrium always exists. Exact conditions under which the equilibrium involves mixed strategies are provided. The mixed equilibrium features: (i) cross-subsidization across risk levels, (ii) dependence of offers on the risk distribution and (iii) price dispersion generated by firm randomization over offers.

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 show that a unique symmetric equilibrium always exists. Exact conditions under which the equilibrium involves mixed strategies are provided. The mixed equilibrium features: (i) cross-subsidization across risk levels, (ii) dependence of offers on the risk distribution and (iii) price dispersion generated by firm randomization over offers.