Implementation and information in teams

A risk-neutral principal hires risk-averse agents to work in a team production process. Each agent can observe the actions taken by some subset of the other agents, and (perhaps) the realization of a random variable which is correlated with output. The principal cannot observe actions or the random variable. However, the agents can communicate with the principal, and final output is verifiable. We characterize the information structures that make it possible for the principal to implement his first best. In general it will be desirable to restrict the information available to the agents. If the first best can be implemented, then it can be implemented by a very simple mechanism, in which each agent forecasts the team output, but sends no other message.     

Signaling and Efficiency in Gift Exchange: An Application to Tipping

In the gift exchange principal–agent game, other‐regarding preferences can be sufficient to support an efficient equilibrium with a strictly positive transfer. When the agent is uncertain about the altruism of the principal or the extent to which the principal adheres to social norms, however, he chooses a suboptimal level of effort to insure himself against unfair outcomes. I demonstrate that under certain conditions, a relatively simple change to the structure of the game allows the principal to costlessly signal his type and restores efficiency. I argue that this result has implications for the design of gratuity‐based service industries. Copyright © 2016 John Wiley & Sons, Ltd.     

Informed principal and information gathering agent

We study a principal–agent model in which the principal has a production technology. The efficiency parameter of the principal’s technology is not known to the agent. Alternatively, the principal can make the agent use a technology from a different channel. By gathering information at a cost, the agent can be informed privately of the efficiency of the technology that he may acquire from another source. We find that the principal requires the agent to adopt the principal’s technology more (less) often when the cost of gathering information on the other technology is small (large). Also, with two states of nature, the outcome is first-best when the information gathering cost is intermediate.      

On characterizing the probability of survival in a large competitive economy

We consider a Walrasian exchange economy in which an agent is characterized by a utility function, a random endowment vector, and a function that specifies the minimum expenditure necessary for survival at a given price system. If at any equilibrium price system, the income of the agent is no more than the minimum expenditure for survival, it is ruined. The main results characterize the probability of ruin when the number of agents is large. The implications of stochastic dependence among agents are explored.     

Costly State Verification with Varying Risk Preferences and Liability

Abstract.  In the scenario of loan contracts with costly state verification, we examine how the properties of the set of states, different risk preferences of debtors and varying liability of lenders affect the structure of optimal repayments. In particular, we show that with risk‐averse debtors, a general set of states, a constant observation cost and both unlimited and limited lender liability, the debtor is strictly better off revealing the true state of nature when his realized revenue is low, which implies that optimal debtor consumption has a downward jump around the single switch from observed to unobserved states. If the debtor can destroy revenue or if the debtor is risk neutral, this non‐monotonicity of consumption disappears. Moreover, given the loan size, there is more monitoring under debtor‐risk aversion than risk neutrality. We present simulations showing that a contract with unlimited lender liability and debtor‐risk aversion has a higher expected observation cost but a lower variance of consumption than a contract with limited lender liability. Finally, we discuss the problems of commitment to verification and contract renegotiation in this framework.     

Optimal effort in the principal-agent problem with time-inconsistent preferences

This paper incorporates an agent’s time-inconsistent preferences into the Sannikov (2008) contract model to explore the effects of an agent’s preferences on his own behaviors: the incentive effort choice, the optimal retirement time and the consumption flow during his whole career life. We find the agent’s time inconsistency makes it difficult for him to be motivated and makes him need more compensation. An agent’s time-inconsistency erodes both the principal and his own income. The time-inconsistent agent will choose a lower incentive effort level, retire at an earlier time and have a lower consumption flow compared with his time-consistent peer. The time-inconsistent preference exactly influences the agents behavior and makes the agency problem more serious. Therefore, the firm has to cost more to stimulate such a time-inconsistent agent, which will damage the firms profits, as well as the efficiency.     

Proportional distribution schemes

An amount of income can be obtained jointly by m agents, the ith agent's share of income being θ_i. The income and the utilities of each agent are functions of the state of nature. Each agent has a probability measure over the states of nature. An efficient proportional distribution is one which is (1) Pareto optimal and for which (2) the expected proportion of income agent i recieves divided by θ_i is independent of i. It is shown that if the attitudes are strictly concave then there exists exactly one proportional distribution scheme. Furthermore, in special cases, each agent expects to recieve an income that exceeds his share.     

Retaining skilled employees: A human capital model with innovation and entrepreneurship

In his seminal paper, Becker argues that firms never invest in general human capital in a frictionless labor market. Nevertheless, empirical evidence shows the opposite. This paper sheds light on this puzzle by developing a principal–agent model with human capital investments. The novel feature of the model is that specific human capital increases the agent's probability to innovate. Innovation brings the opportunity of entrepreneurship, which means losing a skilled agent for the principal. The results show that higher entrepreneurial income increases the risk of employee departure and the principal may use general human capital investment for retention.     

Stackelberg equilibrium with multiple firms and setup costs

I provide conditions that guarantee that a Stackelberg game with a setup cost and an integer number of identical leaders and followers has an equilibrium in pure strategies. The main feature of the game is that when the marginal follower leaves the market the price jumps up, so that a leader’s payoff is neither continuous nor quasiconcave. To show existence I check that a leader’s value function satisfies the following single crossing condition: When the other leaders produce more the leader never accommodates entry of more followers. If demand is strictly logconcave, and if marginal costs are both non decreasing and not flatter than average costs, then a Stackelberg equilibrium exists. Besides showing existence I characterize the equilibrium set and provide a number of results that contribute to the applied literature. As the number of leaders increases, leaders produce more and eventually they deter entry. Leaders produce more than the Cournot best reply, but they may underinvest in entry deterrence. As the number of followers increases, leaders become more aggressive. When this number is large, if leaders can produce the limit quantity and at the same time have market power, then they deter entry.     

Bilateral redistribution

We explore the implications of three basic and intuitive axioms for income redistribution problems: continuity, no transfer paradox and stability. The combination of the three axioms characterizes in the two-agent case a large family of rules, which we call threshold rules. For each level of total income in society, a threshold is considered for each agent. It is impossible for both agents to be below their respective thresholds. If an agent’s income is below the threshold, the difference is redistributed from the other agent; otherwise, the rule imposes laissez-faire.     

交通基础设施建设、劳动力流动与城乡收入差距

基于1992—2017年我国29个省区市的面板数据,采用非线性门槛模型系统地分析交通基础设施建设、劳动力流动和城乡收入差距之间的关系。研究结果表明：交通基础设施建设能够有效促进农业劳动力向非农业部门的流动,进而影响城乡收入差距,并且交通基础设施建设对城乡收入差距的影响并非呈现简单的线性相关关系,而是随着农村劳动力转移程度的变化呈现出“U”型的动态相关关系。当农村劳动力转移率低于0.157时,交通基础设施建设能够缩小城乡收入差距;当农村劳动力转移率超过0.288时,交通基础设施建设不利于缩小城乡收入差距,并且随着农村劳动力转移率的进一步提高,交通基础设施建设对城乡收入差距的负面影响会增大。     

Information Acquisition and the Equilibrium Incentive Problem

I study the optimal incentive provision in a principal–agent relationship with costly information acquisition by the agent. I emphasize that adverse selection or moral hazard is the principal's endogenous choice by inducing or deterring information acquisition. The principal designs the contract not only to address an existing incentive problem but also to implement its presence. Implementation of adverse selection relies on a steeper information rent to the agent than the standard menu, such that the agent is motivated to distinguish the efficient state of nature from the inefficient. Moral hazard is implemented by replacing the benchmark debt contract with a debt‐with‐equity‐share contract, such that the agent does not attempt to acquire information to either avoid debt or to extract rent.     

大股东会计信息披露质量的选择分析

目前在大部分上市公司中大股东仍然占有绝对的决策权,并决定了企业的会计披露政策,大股东必须进行会计信息披露程度的收益成本权衡,只有当企业提高会计披露质量,满足投资需求能够使大股东获得更多的现金流时,才会愿意提供更高质量的会计信息。本文通过对大股东面临会计披露程度选择决策时的成本收益权衡进行验证,试图发现促使大股东愿意提高会计信息披露质量的激励因素,以促使企业会计信息质量的改进。     

Incorporating a “no claim bonus” in insurance agency contract

A bonus received by an agent from an insurer when the insured does not make a claim is called a “no claim bonus” (NCB). An NCB rewards the agent's risk‐management (RM) effort that reduces the probability that the insured suffers a loss. This paper designs an incentive compatible contract that induces the agent to choose an RM effort. If the agent's RM effort cost is lower than a threshold, feasible ranges of NCB and premium values exist such that the insurer can offer an incentive compatible agency contract with an NCB that is acceptable to the agent.     

Testing income series: An application of principal components

A methodology based on principal components is developed for the testing and estimation of aggregate income series. The technique consists in extracting the first principal component from residuals of estimated demand functions which would incorporate the real income effect and other random disturbances. The first component should then reflect the behavior of real income. The procedure is applied to test Brazilian output series estimated by the author, covering the period 1911–1939, and to compare those series with the ones previously available for Brazil.     

Contracts with Wishful Thinkers

In a setting with a wishful thinking agent and a realistic principal, the paper studies how incentive contracts should be designed to control for both moral hazard and self‐deception. The properties of the contract that reconcile the agent with reality depend on the weight the agent attaches to anticipatory utility. When this is small, principal and agent agree on full recollection. For intermediate values the principal bears an extra cost to make the agent recall bad news. For large weights, the principal gives up on inducing signal recollection. We also extend the analysis to the case in which the parameter of anticipatory utility is private information.     

Existence of solutions to principal–agent problems with adverse selection under minimal assumptions

We prove an existence result for the principal–agent problem with adverse selection under general assumptions on preferences and allocation spaces. Instead of assuming that the allocation space is finite-dimensional or compact, we consider a more general coercivity condition which takes into account the principal’s cost and the agents’ preferences. Our existence proof is simple and flexible enough to adapt to partial participation models as well as to the case of type-dependent budget constraints.     

社会责任报告鉴证、审计风险与审计费用——基于A股上市公司的经验数据

以2011—2016年间发布社会责任报告的A股上市公司为样本，研究社会责任报告鉴证对审计风险与审计费用的影响。研究发现：企业社会责任表现越好，审计风险与审计费用越低；社会责任报告鉴证总体上未能降低审计风险和审计费用，但由会计师事务所实施的社会责任报告鉴证、依据规范的鉴证以及连续开展的鉴证可以显著降低审计风险和审计费用；国有企业与敏感性行业的企业开展社会责任报告鉴证可以显著降低审计风险和审计费用，但目前对于强制发布社会责任报告的企业，鉴证的这一效用并不明显。     

Solving the liquidity constraint by options on futures

The aim of this paper is to show that an option on futures may solve the liquidity constraint problem. I consider a consumer (or an investor) who wishes to discount her future income in order to finance her present consumption (investment). Under asymmetric information, such an agent may incur a liquidity constraint (credit rationing). However, the optimal constrained consumption, as a function of future income, resembles a short position of a put option written on future income. This implies that allocating savings to a long call option position on futures may restore the unconstrained relationship between the optimal present consumption and future income. The option on a futures contract is constructed so that the (future) agent’s income is correlated with some futures contract (but this is private information) on which the option is issued. The allocation of savings of the borrower to the option on futures turns out to be financially beneficial compared to the allocation of savings to the risk-free investment.     

Mean demand when consumers satisfy the weak axiom of revealed preference

In this paper we consider consumption sectors of individuals who's demand functions are homogeneous of degree zero in prices and income. All individuals hold the same income and satisfy the corresponding budget identity and the weak axiom of revealed preference. It is shown that on any compact set of strictly positive prices and incomes this setup does not impose any restrictions on the class of mean demand functions other than the budget identity, provided the individual consumption sets are unbounded. If they are bounded below the result holds locally.