Loading

Error: Cannot Load Popup Box

Hit List

Title:

From Posteriors to Priors via Cycles: An Addendum

Description:

Rodrigues-Neto (2009) has shown that a given specification of posteriors of different players in an incomplete-information setting is compatible with a common prior if and only if the posteriors satisfy the so-called cycle equations. This note shows that, if, for any player, any element of the partition of the this player has a nonempty intersec...

Rodrigues-Neto (2009) has shown that a given specification of posteriors of different players in an incomplete-information setting is compatible with a common prior if and only if the posteriors satisfy the so-called cycle equations. This note shows that, if, for any player, any element of the partition of the this player has a nonempty intersection with any element of the partition of any other player, then it suffices to verify the cycle equations for all cycles of length 4 or less. ; Belief systems, consistency, common priors, cycle equations Minimize

Document Type:

preprint

URL:

Content Provider:

My Lists:

My Tags:

Notes:

Title:

Incomplete-Information Models of Large Economies with Anonymity: Existence and Uniqueness of Common Priors

Description:

The paper provides a speci?cation of belief systems for models of large economies with anonymity in which aggregate states depend only on cross-section distributions of types. For belief systems satisfying certain conditions of mutual absolute continuity, the paper gives a necessary and sufficient condition for the existence of a common prior. U...

The paper provides a speci?cation of belief systems for models of large economies with anonymity in which aggregate states depend only on cross-section distributions of types. For belief systems satisfying certain conditions of mutual absolute continuity, the paper gives a necessary and sufficient condition for the existence of a common prior. Under the given conditions, the common prior is unique. ; Large Economy, Belief systems, consistency, common prior Minimize

Document Type:

preprint

URL:

Content Provider:

My Lists:

My Tags:

Notes:

Title:

Nonlinear Incentive Provision in Walrasian Markets: A Cournot Convergence Approach

Description:

The paper studies insurance with moral hazard in a system of contingent-claims markets. Insurance buyers are modelled as Cournot monopolists or oligopolists. The other agents condition their expectations on market prices, as in models of rational-expectations equilibrium with asymmetric information. Thereby they correctly anticipate accident pro...

The paper studies insurance with moral hazard in a system of contingent-claims markets. Insurance buyers are modelled as Cournot monopolists or oligopolists. The other agents condition their expectations on market prices, as in models of rational-expectations equilibrium with asymmetric information. Thereby they correctly anticipate accident probabilities corresponding to effort incentives induced by insurance buyers’ net trades. When there are many agents to share the insurance buyer’s risk, Cournot equilibrium outcomes are close to being second-best. In contrast, if insurance buyers are price takers, equilibria fail to exist or are bounded away from being second-best. ; Insurance, Moral Hazard, Incentive Contracting, Walrasian Markets, Rational-Expectations, Cournot Equilibrium Minimize

Document Type:

preprint

URL:

Content Provider:

My Lists:

My Tags:

Notes:

Title:

Optimal Income Taxation, Public-Goods Provision and Public-Sector Pricing: A Contribution to the Foundations of Public Economics

Description:

The paper develops an integrated model of optimal nonlinear income taxation, public-goods provision and pricing in a large economy. With asymmetric information about labour productivities and publicgoods preferences, the multidimensional mechanism design problem becomes tractable by requiring renegotiation proofness of the final allocation of pr...

The paper develops an integrated model of optimal nonlinear income taxation, public-goods provision and pricing in a large economy. With asymmetric information about labour productivities and publicgoods preferences, the multidimensional mechanism design problem becomes tractable by requiring renegotiation proofness of the final allocation of private goods and admission tickets for excludable public goods. Under an affiliation assumption on the underlying distribution, optimal income taxation, public-goods provision and admission fees have the same qualitative properties as in unidimensional models. These properties are obtained for utilitarian welfare maximization and for a Ramsey-Boiteux formulation with interim participation constraints. ; Optimal Income Taxation, Public Goods, Public-Sector Pricing, Multidimensional Mechanism Design, Ramsey-Boiteux Pricing Minimize

Document Type:

preprint

URL:

Content Provider:

My Lists:

My Tags:

Notes:

Title:

The Provision and Pricing of Excludable Public Goods: Ramsey-Boiteux Pricing versus Bundling

Description:

This paper studies the relation between Bayesian mechanism design and the Ramsey-Boiteux approach to the provision and pricing of excludable public goods. For a large economy with private information about individual preferences, the two approaches are shown to be equivalent if and only if, in addition to incentive compatibility and participatio...

This paper studies the relation between Bayesian mechanism design and the Ramsey-Boiteux approach to the provision and pricing of excludable public goods. For a large economy with private information about individual preferences, the two approaches are shown to be equivalent if and only if, in addition to incentive compatibility and participation constraints, the .nal allocation of private-good consumption and admission tickets to public goods satis.es a condition of renegotiation proofness. Without this condition, a mechanism involving mixed bundling, i.e. combination tickets at a discount, is superior. ; Mechanism Design, Excludable Public Goods, Ramsey-Boiteux Pricing, Renegotiation Proofness, Bundling Minimize

Document Type:

preprint

URL:

Content Provider:

My Lists:

My Tags:

Notes:

Title:

The Undesirability of Randomized Income Taxation under Decreasing Risk Aversion

Description:

For the standard specification of the utilitarian optimal income tax problem with hidden characteristics, the paper shows that randomized tax schemes are undesirable if preferences exhibit a property of weakly decreasing risk aversion according to the multidimensional risk aversion concept of Hellwig (2004). The property of decreasing risk avers...

For the standard specification of the utilitarian optimal income tax problem with hidden characteristics, the paper shows that randomized tax schemes are undesirable if preferences exhibit a property of weakly decreasing risk aversion according to the multidimensional risk aversion concept of Hellwig (2004). The property of decreasing risk aversion also implies uniqueness of the optimal income tax schedule and continuity in cases where the type distribution has a continuous density. ; Optimal Income Taxation, Randomized Incentive Schemes, Nonincreasing Risk Aversion Minimize

Document Type:

preprint

URL:

Content Provider:

My Lists:

My Tags:

Notes:

Title:

Risk Aversion in the Small and in the Large. When Outcomes are Multidimensional

Description:

The paper discusses criteria for comparing risk aversion of decision makers when outcomes are multidimensional. A weak concept, ”commodity specific greater risk aversion”, is based on the comparison of risk premia paid in a specified commodity. A stronger concept, ”uniformly greater risk aversion” is based on the comparison of risk premia regard...

The paper discusses criteria for comparing risk aversion of decision makers when outcomes are multidimensional. A weak concept, ”commodity specific greater risk aversion”, is based on the comparison of risk premia paid in a specified commodity. A stronger concept, ”uniformly greater risk aversion” is based on the comparison of risk premia regardless of what commodities are used for payment. Neither concept presumes that von Neumann-Morgenstern utility functions are ordinally equivalent. Nonincreasing consumption specific risk aversion is shown to be sufficient to make randomization undesirable in an agency problem with hidden characteristics. ; Multidimensional Risks, Risk Aversion, Risk Premia, Randomization in Incentive Schemes Minimize

Document Type:

preprint

URL:

Content Provider:

My Lists:

My Tags:

Notes:

Title:

A Contribution to the Theory of Optimal Utilitarian Income Taxation

Description:

The paper provides a new proof of the positivity of the optimal marginal income tax, in a more general model, under weaker assumptions. The analysis focusses on the (weakly) relaxed problem in which upward incentive constraints are replaced by a monotonicity condition on consumption. Without upward incentive constraints, nonnegativity of the opt...

The paper provides a new proof of the positivity of the optimal marginal income tax, in a more general model, under weaker assumptions. The analysis focusses on the (weakly) relaxed problem in which upward incentive constraints are replaced by a monotonicity condition on consumption. Without upward incentive constraints, nonnegativity of the optimal marginal income tax is straightforward; strict positivity follows from an assumption on the desirability of redistributing leisure. The resulting allocation is incentive compatible, and is optimal for the original income tax problem. The argument is the same for distributions with finitely many types and for a continuous type distribution. ; Optimal Income Taxation, Utilitarian Welfare Maximization, Redistribution Minimize

Document Type:

preprint

URL:

Content Provider:

My Lists:

My Tags:

Notes:

Title:

Switzerland and Euroland: European Monetary Union, Monetary Stability and Financial Stability

Description:

This contribution to the Festschrift for the Centenary of the Swiss National Bank discusses the prospects for monetary stability and financial stability after the creation of the European Monetary Union. Topics covered include the robustness of institutional arrangements and their implications for monetary stability, the implications for a small...

This contribution to the Festschrift for the Centenary of the Swiss National Bank discusses the prospects for monetary stability and financial stability after the creation of the European Monetary Union. Topics covered include the robustness of institutional arrangements and their implications for monetary stability, the implications for a small, nonparticipating country, and the problem of financial stability in a setting in which banking supervision is national and the lender of the last resort is supranational. ; European Monetary Union, European Central Bank, Monetary Stability, Banking Supervision, Financial Crisis Management Minimize

Document Type:

preprint

URL:

Content Provider:

My Lists:

My Tags:

Notes:

Title:

Market Discipline, Information Processing, and Corporate Governance

Description:

The paper reviews and assesses our understanding of the notion of “market discipline” in corporate governance. It questions the wholesale appeal to this notion in policy discussion, which fails to provide an account of the underlying mechanisms in terms of theory and empirical analysis. Discipline that is provided by the “market” must be compare...

The paper reviews and assesses our understanding of the notion of “market discipline” in corporate governance. It questions the wholesale appeal to this notion in policy discussion, which fails to provide an account of the underlying mechanisms in terms of theory and empirical analysis. Discipline that is provided by the “market” must be compared to discipline that is provided by other institutions, e.g., intermediaries acting as “delegated monitors”. The comparative assessment depends on (i) the information technology, (ii) the role of strategic interactions, and (iii) the disciplinary mechanism itself. Concerning (i), the question is whether the benefits of multiple sources of information exceed the costs. Concerning (ii), strategic interactions concern the free-rider problem in acquiring information that benefits all financiers, as well as distributive externalities involved in exploiting an information advantage to the detriment of other financiers. Concerning (iii), the question is whether investors have explicit intervention rights or whether “discipline” results from managerial acquiescence. As for the acquisition and aggregation of information in organized markets, positive welfare effects arise only if the information is put to productive use, either through improvements in real investment and managerial incentives, or through changes in corporate control. Necessary conditions for such benefits to arise are fairly restrictive, especially if the changes that occur are based on managerial acquiescence rather than the legal intervention rights of investors. The expansion of market-based managerial incentives in the nineties had little to do with these theoretical accounts. The experience of moral hazard that has accompanied this expansion, on the side of gatekeeping institutions as well as corporate management, confirms the predictions of theory about the potential for shortfalls in market discipline and the agency costs of equity finance through the open market. Minimize

Document Type:

preprint

URL:

Content Provider:

My Lists:

My Tags:

Notes:

Currently in BASE: 69,672,666 Documents of 3,344 Content Sources

http://www.base-search.net