Subjective Performance Evaluations and Reciprocity in Principal–Agent Relations

We conduct a laboratory experiment with agents working on, and principals benefiting from, a real effort task in which the agents' performance can only be evaluated subjectively. Principals give subjective performance feedback to agents, and agents have an opportunity to sanction principals. In contrast to existing models of reciprocity, we find that agents tend to sanction whenever the feedback of principals is below their subjective self‐evaluations even if agents' pay‐offs are independent of it. In turn, principals provide more positive feedback (relative to their actual performance assessment of the agent) if this does not affect their pay‐off.     

Undominated Nash Implementation with Collusion and Renegotiation

This article looks at implementation in economic environments when agents have perfect information about the state of the world, but cannot commit not to renegotiate bad outcomes or to collude against each other. If renegotiation satisfies a weak condition of disagreement point monotonicity, then any Pareto-efficient social choice function can be implemented if there are at least three agents who play undominated Nash equilibria. The mechanism does not use modulo or integer games, has no bad mixed strategy equilibria, and is “bounded.”Journal of Economic LiteratureClassification Number: D71.     

Bounded Rationality in Principal‐Agent Relationships

We conducted six treatments of a standard moral hazard experiment with hidden action. The behavior in all treatments and periods was inconsistent with established agency theory. In the early periods, behavior differed significantly between treatments. This difference largely vanished in the final periods. We used logit agent quantal response equilibrium (LAQRE) as a device to grasp boundedly rational behavior and found the following: (1) LAQRE predictions are much closer to subjects' behavior in the laboratory; (2) LAQRE probabilities and experimental behavior show remarkably similar patterns; and (3) including social preferences in LAQRE does not better explain the experimental data; (4) LAQRE cannot explain the contract offers of some players who seem to choose some focal contract parameters.     

Tacit Collusion and Non–uniform Prices

This article examines the possibility of building a tacit agreement between price–setters that yields non–uniform pricing. It is shown that firms with market power may restrict competition not only by alternating between periods of high prices and low prices (Green and Porter (1984), Rotemberg and Saloner (1986)), but also by always charging different prices and taking turns in being the monopolist. In contrast with the existing literature, price variability is not due to imperfect monitoring, stochastic demand or short–run pricing rigidity but it is a pure supply side effect. The author provides the necessary conditions to have collusion with non–uniform pricing, and shows that the latter dominates a fixed price solution. In terms of competition policy this result confirms that no price parallelism is not, per se , a signal of no collusion.     

A Theory of Credit Ceilings in a Model of Debt and Renegotiation

A model is considered in which an entrepreneur uses debt to finance a risky investment project. He may in certain circumstances credibly threaten default on the loan, which is then renegotiated. However, lenders will never lend so much that default is credibly threatened in all states. There exists a 'credit ceiling' which, if binding, implies underinvestment. The paper discusses the determinants of the credit ceiling and derives some comparative statics results. For example, it is shown that the credit ceiling is raised by a mean-preserving spread of the firm's revenues. Also, a borrower may benefit from a reduction in his bargaining power.     

Collusion and discrimination in organizations

In a principal-multi-agent setting we investigate how optimal contracts should be modified under relative performance evaluation when agents collude. Agents may write side-contracts, which are not contingent on their effort choices but indirectly control them through side-transfers. We show that the optimal collusion-proof contract is to introduce a “discriminatory policy” in the sense that the wage schemes offered to agents depend on their identities even if they are identical with respect to productive abilities. Such discriminatory wage schemes explain the organizational strategy of “divide and conquer” as an optimal response to collusion.     

风险投资中的委托代理关系

<正> 风险投资是一种向新兴的、迅速发展并有巨大增长潜力的企业,尤其是高科技企业,提供股权投资以获取高资本收益的投资行为。正如我国其它类型的企业一样,在风险资本运行的过程中,也会产生明显的委托代理关系,从而对高科技企业的治理结构及其治理机制安排产生影响。这一问题需要得到科学、有效的研究与解决。本文结合风险投资工作的实践和相关研究,从对风险投资的对象——风险企业角度,对此问题作一探讨。逆向选择和道德风险:风险企业同样面临的委托代理问题委托代理理论的核心问题是如何保     

Collusion in homogeneous and heterogeneous tournaments

In tournaments, only the relative performance of agents is important. Therefore, the agents have an incentive to collude by jointly deviating to low effort levels. Previous papers on collusion have proposed to make the tournament asymmetric to prevent agents from colluding. However, by allowing side payments between the agents and focusing on implicit enforcement of collusion, the current study demonstrates that this is not true. Often, the principal prefers to hire homogeneous agents to make collusions less stable.     

Stackelberg Beats Cournot — On Collusion and Efficiency in Experimental Markets

We report on an experiment designed to compare Stackelberg and Cournot duopoly markets with quantity competition. We implement both a random matching and a fixed-pairs version for each market. Stackelberg markets yield, regardless of the matching scheme, higher outputs than Cournot markets and, thus, higher efficiency. For Cournot markets, we replicate a pattern known from previous experiments. There is stable equilibrium play under random matching and partial collusion under fixed pairs. We also find, for Stackelberg markets, that competition becomes less intense when firms remain in pairs but we find considerable deviations from the subgame perfect equilibrium prediction which can be attributed to an aversion to disadvantageous inequality.     

Tacit Collusion in a Spatial Model with Delivered Pricing

Received August 5, 1999; revised version received July 20, 2001     

同质市场中产量匹配惩罚策略下的默契合谋

本文研究了同质产品市场中产量匹配惩罚策略下的默契合谋。我们得到的结论如下:(1)同质市场中的默契合谋是可能的;(2)垄断产量不可能通过合谋实现;(3)与纳什回归惩罚策略相比,合谋有可能更加困难,也有可能同等容易。我们将得到的结论与Lu and Wright(2010)所研究的价格匹配惩罚策略下的默契合谋进行了比较,并给出了一个线性需求函数的例子。     

Reconsidering The Price–Income Relationship Across Countries

This study reconsiders the well‐known cross‐country positive association between prices and income by focusing on heterogeneity between the inter‐developed‐country and inter‐developing‐country relationships. Empirical results suggest that developed and developing countries exhibit the positive price–income association for different reasons. Specifically, we find only for the inter‐developed‐country case that the positive price–income association is attributable, at least partly, to the Balassa–Samuelson productivity differential effect. The idiosyncrasy of the inter‐developing‐country relationship is not dissolved by controlling for the effects of a variety of real and financial variables. The findings cast some doubt on the conventional explanation for the cross‐country price–income relationship.     

Fairness and Incentives in a Multi‐task Principal–Agent Model

This paper reports on a two‐task principal–agent experiment in which only one task is contractible. The principal can either offer a piece‐rate contract or a (voluntary) bonus to the agent. Bonus contracts strongly outperform piece‐rate contracts. Many principals reward high effort on both tasks with substantial bonuses. Agents anticipate this and provide high effort on both tasks. In contrast, almost all agents with a piece‐rate contract focus on the first task and disregard the second. Principals understand this and predominantly offer bonus contracts. This behavior contradicts the self‐interest theory but is consistent with theories of fairness.     

Self‐protection? Antidumping Duties,Collusion, and FDI*

It is well established that the threat of antidumping duties can help sustain collusion between a foreign firm and its domestic counterpart. However, when the foreign firm is a multinational with a subsidiary in the domestic country, that subsidiary can undermine efforts for protection, thereby diminishing the threat of duties that would otherwise sustain collusion. Accordingly, we show that the multinational may choose to submit to a tariff even under collusion since evidence indicates that duties are more difficult to remove than initiate. In this way, it is possible to obtain a greater degree of commitment, although it comes at a cost. Nevertheless, we prove that this can be a more profitable strategy than those previously explored. Thus, a parent firm may instruct its subsidiary to support duties against the parent. In fact, we find several cases where subsidiaries of multinationals have indeed filed for protection from their own parents.     

Collusion, Exclusion, and Inclusion in Random-Order Bargaining

This paper examines the profitability of three types of integration in a cooperative game solved by a random-order value ( e.g. the Shapley value). Collusion between players  i  and  j  is a contract merging their resources in the hands of one of them, say  i  . This contract can be represented as a combination of exclusion, which lets  i  exclude  j  's resource but not use it himself, and inclusion, which lets  i  use  j  's resource but not exclude  j  from it. This representation yields a third-difference condition on the characteristic function that determines the profitability of collusion, generalizing existing results for specific games. Namely, collusion is profitable [unprofitable] when the complementarity of the colluding players is reduced [increased] by other players.     

The Dynamic Relationship Between Corruption–Inflation: Evidence From Panel Vector Autoregression

This paper aims to explain the mixed causality nexus between corruption and inflation. For that, we apply a panel vector autoregression model on a large sample of 180 countries over the period 1996–2014. Using two corruption indexes and subsample estimations, results provide evidence that the inflation–corruption nexus is bidirectional. The causal effect is more important from corruption to inflation. Interactions remain significant but heterogeneous across subsamples with different income levels. The corruption effect is persistent only in low–middle income economies and its adverse effect on inflation is weaker in high‐income economies. The two‐way relationship between inflation and corruption reflects the inability to control inflation and the situation of the poverty trap in some countries.     

多重委托-代理关系与国有银行治理结构的完善

国有银行管理体制的实质是多重委托代理关系，在这种多重委托－代理框架内，由于信息不对称，就会产生严重的代理问题。完善国有银行的治理结构必须改革产权制度，明确银行法人治理目标，完善法人治理的契约体系和银行内部治理机制。     

Collusion in mixed oligopolies and the coordinated effects of privatization

We study the sustainability of collusion in mixed oligopolies where private and public firms only differ in their objective: private firms maximize profits, while public firms maximize total surplus. If marginal costs are increasing, public firms do not supply the entire market, leaving room for private firms to produce and possibly cooperate by restricting output. The presence of public firms makes collusion among private firms harder to sustain, and maybe even unprofitable. As the number of private firms increases, collusion may become easier or harder to sustain. Privatization makes collusion easier to sustain, and is socially detrimental whenever firms are able to collude after privatization (which is always the case if they are sufficiently patient). Coordinated effects thus reverse the traditional result according to which privatization is socially desirable if there are many firms in the industry.     

Central Bank and Commercial Banks' Liquidity Management – What is the Relationship?

The paper explores the relation between individual banks' liquidity management in the euro area and the ECB's management of the aggregate current accounts held by banks with the Eurosystem. It is argued that, in the case of the euro area with its large, remunerated reserve requirements that have to be fulfilled only on average over a one-month period, the banks' demand for working balances to serve as a buffer against market imperfections is always below reserve requirements. It is therefore normally sufficient for the ECB when steering short-term interest rates to control aggregate liquidity in a way that the aggregate banking system is in a position to fulfil adequately its reserve requirements. In particular, the ECB normally does not need to take care of any factors that affect temporarily the demand for working balances, such as the level and uncertainties of interbank payment flows. However, two exceptions are noteworthy and are discussed in the paper: the banks' balance sheet management activities implying a regular end of month peak of the EONIA rate; and the liquidity situation in the case of substantive market tensions as in the days following the terrorist attacks of 11 September 2001. The need of the ECB's liquidity management to address the associated deviations from a model of perfect markets is discussed.