Non-commitment and savings in dynamic risk-sharing contracts

Summary. We characterize the solution to a dynamic model of risk sharing under non-commitment when saving is possible. Savings can play two important roles. First savings can be used to smooth aggregate consumption across different periods. Second, when savings are observable, they can act as a collateral that can be seized in the case of default. This relaxes the non-commitment constraint. When the aggregate income is fixed or when one of the agent is risk neutral, the allocation tends to first-best consumption. When one of the agent is risk neutral, this convergence occurs in an expected finite number of periods.Received: 17 March 2004, Revised: 8 March 2005, JEL Classification Numbers: C7, D9.Michel Poitevin: Correspondence toWe gratefully acknowledge financial support from F.C.A.R., C.R.S.H. and C.I.R.A.N.O.     

Cost–consequence analysis of a hemostatic matrix alone or in combination for spine surgery patients

Background: A five-year retrospective database analysis comparing the use of Floseal¹ flowable topical hemostat alone (F) and in combination with gelatin/thrombin (F?+?G/T) to achieve hemostasis and control surgical bleeding showed higher resource utilization for F?+?G/T cases relative to F matched pairs during spinal surgery. Lower resource use in the F group was characterized by shorter hospital length of stay and surgical time as well as fewer blood transfusions and less hemostat agent used per surgery.

Objective: To evaluate the cost–consequence of using F compared to F?+?G/T in minor, major and severe spinal surgery from the US hospital perspective.

Methods: A cost–consequence model was developed using the US hospital perspective. Model inputs include clinical inputs from the literature, cost inputs (hemostatic matrices, blood product transfusion, hospital stay and operating room time) from the literature, and an analysis of annual spine surgery volume (minor, major and severe) using the 2012 National Inpatient Sample (NIS) database. Costs are reported in 2017?US dollars. One-way and probabilistic sensitivity analyses address sources of variability in the results.

Results: A medium-volume hospital (130 spine surgeries per year) using F versus F?+?G/T for spine surgeries is expected to require 85 less hours of surgical time, 58 fewer hospital days and 7 fewer blood transfusions in addition to hemostat volume savings (F: 1?mL, thrombin: 1994?mL). The cost savings associated with the hospital resources for a medium-volume hospital are expected to be $317,959 (surgical hours?=?$154,746, hospital days?=?$125,237, blood transfusions?=?$19,023, hemostatic agents?=?$18,953) or $2445 per spine surgery.

Conclusions: The use of F versus F?+?G/T could lead to annual cost savings for US hospitals performing a low to high volume of spinal surgeries per year.     

Social learning in coordination games: does status matter?

We report the results of experiments designed to test the impact of social status on learning in a coordination game. In the experiment, all subjects observe the play of an agent who either has high status or low status. In one treatment the agent is another player in the game; in the other the agent is a simulated player. Status is assigned within the experiment based on answers to a trivia quiz. The coordination game has two equilibria: one is payoff-dominant but risky, and the other is risk-dominant. The latter is most commonly chosen in experiments where there is no coordination device. We find that a commonly observed agent enhances coordination on the payoff-dominant equilibrium more often when the agent has high status.      

政府投资项目双层多级委托代理链的分析

本文分析了政府投资项目双层多级委托代理链和两个层次中的代理人问题.第一层委托代理关系是从公众到政府代理,主要的代理问题是对公共权力的约束.第二层委托代理关系是从政府代理人到项目业主和项目执行团队,主要代理问题是政府代理人如何约束其项目业主.在第二层委托代理关系中我国政府投资项目管理方式改革发展方向是以业主市场代理模式取代业主行政代理模式.代建制的推行就是为了适应这种发展趋势的改革举措.     

Credible delegation

We show that the vertical delegation of decision-making authority to agent firms can act as a credible strategic commitment even when contracts are unobservable (or renegotiable) if and only if multilateral delegation is combined with decentralized ownership of the agent firms. In this case, the possibility of renegotiation of other agents’ contracts constrains the set of contracts acceptable to each agent. Delegation may induce more or less aggressive behavior, depending on the nature of within-structure competition among the agent firms. Thus, delegation may be a valuable, credible strategic commitment mechanism when strategies are either substitutes or complements.     

Cooperation by way of support in a rent seeking contest for a public good

This paper analyzes the efforts made to influence a decision that can have two outcomes. First, the agents on the same side designate an agent to play the contest for them. The inactive agents can then decide to support this active agent, i.e. pay a percentage of his effort. It is optimal to designate either the agent with the lowest stake (who will receive support from everyone else) or the agent with the highest stake (who will not receive support) as the active agent. We find that the side with the higher aggregate stake may have the lower success probability.     

Self-regulatory strength and dynamic optimal purchase

I study a single-agent dynamic purchase problem by using a Gul and Pesendorfer’s [Gul, F., Pesendorfer, W., 2007. Harmful addiction. Review of Economic Studies 74 (1), 147-172] dynamic preference: extreme self-control cannot be sustained and leads to addiction. This type of agent exhibits a behavioral pattern of self-regulatory depletion.     

The good,the bad and the ugly: agent behavior and efficiency in open and closed organizations

Current literature has largely ignored the fact that some organizations are highly selective when admitting new agents while others are more open. In addition, some organizations audit or sort agent behavior within the organization more aggressively than others. One might expect a priori that closed, highly selective, organizations would always be more efficient because they screen out the worst types, which could lead to better agent behavior. We show that this is not the case. Specifically, when agent behavior in equilibrium is uniform across organizations (i.e., when the number of agents behaving the same way is identical), closed organizations are inefficient. However, when agent behavior varies across organizations, closed organizations may or may not be inefficient, depending on net payoffs to the organization and the agents. Our analysis implies that organizations should choose the open type when screening or sorting costs are high, when there is a high frequency of good agent types in the population, when agent misbehavior does not reduce output significantly, and when penalties for misbehavior are large. The paper has benefitted from useful comments by David Flath, Charles Knoeber, Claudio Mezzetti, two anonymous referees and participants of the Spring 2005 Midwest Economic Theory meetings at Vanderbilt University, the 2005 meetings of the Society for the Advancement of Economic Theory in Vigo, Spain, the 2005 conference on Research in Economic Theory and Econometrics in Syros, Greece, and workshops at North Carolina State University, Texas A&M University and McGill University.     

Output and wages with inequality averse agents

Abstract.  We analyse a two‐task work environment with risk‐neutral but inequality averse individuals. For the agent employed in task 2 effort is verifiable, while in task 1 it is not. Accordingly, agent 1 receives an incentive contract that, owing to his wealth constraint, leads to a rent that the other agent resents. We show that greater inequality aversion unambiguously decreases total output and therefore average labour productivity. More specifically, inequality aversion reduces effort, wage, and payoff of agent 1. Effects on wage and effort of agent 2 depend on whether effort levels across tasks are substitutes or complements in the firm's output function. JEL classification: D2, J3     

A model of boundedly rational “neuro” agents

We consider a model in which each agent in a population chooses one of two options. Each agent does not know what the available options are and can choose an option only after observing another agent who has already chosen that option. In addition, the agents’ preferences over the two options are correlated. An agent can either imitate an observed agent or wait until he meets two agents who made different choices, in which case he can compare their choices and choose accordingly. A novel feature of the model is that agents observe not only the choices made by others, but also some information about the process that led them to those choices. We study two cases: In the first, an agent notes whether the observed agent imitated others or whether he actually compared the available alternatives. In the second, an agent notes whether the observed agent’s decision was hasty or not. It is shown that in equilibrium the probability of making a mistake is higher in the second case and that the existence of these nonstandard “neuro” observations systematically biases the equilibrium distribution of choices.     

Against representative agent methodology

Garnett and Boettke both seek to identify the appropriate behavior for the representative scientist. The social structure of science is better represented, however, with a heterogeneous agent model. Social epistemology and epistemological naturalism provide context for the argument against representative agent methodology. Asking whether individual scientists should “commit themselves to an approach and pursue it doggedly” or make “a professional commitment to intellectual tolerance, openness, and broad-mindedness” is like asking whether it is better to be a bouncer or a bookkeeper. The question depends on particulars that vary from person to person. Down with representative agent methodology. Up with diversity.     

Public health impact of comprehensive hepatitis C screening and treatment in the French baby-boomer population

Objective: To estimate the public health impact of comprehensive hepatitis C virus (HCV) screening and access to all-oral, interferon (IFN)-free direct-acting antivirals (DAAs) in the French baby-boomer population (1945–1965 birth cohorts).

Methods: A sequential, multi-cohort, health-state transition model was developed to assess the impact of different hepatitis C screening and treatment strategies on clinical and economic outcomes in the 1945–1965 birth cohorts. Patients newly-diagnosed with chronic HCV were projected each year from 2016 to 2036 under three screening scenarios (70% [low], 75% [intermediate], and 80% [high] HCV awareness in 2036). Healthcare costs and clinical outcomes (number of liver-related deaths, quality-adjusted life-years [QALYs], life-years [LYs] spent in sustained virologic response [SVR] or with decompensated cirrhosis, hepatocellular carcinoma, or liver transplant) were compared among five treatment strategies (no antiviral therapy; IFN?+?ribavirin?+?protease inhibitor for fibrosis stages F2–F4, IFN-based DAAs for stages F2–F4, IFN-free DAAs for stages F2–F4, and IFN-free DAAs for stages F0–F4).

Results: Diagnosis of HCV genotype 1 was projected for 4,953, 6,600, and 8,368 individuals in the low, intermediate, and high screening scenarios, respectively. In the intermediate scenario, IFN-free DAAs for stages F0–F4 had a favorable cost-effectiveness profile vs IFN-based or IFN-free treatment strategies for F2–F4 and offered the greatest return on investment (0.899 LYs gained in SVR and 0.933 QALYs per €10,000 invested).

Conclusion: Comprehensive HCV screening and access to all-oral, IFN-free DAAs is a cost-effective strategy that could help diminish the upcoming burden of HCV in the French baby-boomer population.     

Mechanism Design under Alternative Information Structures and Constrained Capacity

In applied models, the choice of a particular incomplete information structure appears to have been motivated primarily by technical convenience. The information structures used can be classified as either probabilistic or partitional. Information is probabilistic if no agent can rule out any type profile of the remaining agents and, for at least one type of one agent, the conditional and marginal probability distributions over the remaining agents' types are not equal. Information is partitional if the only information the agents have is that one or more agents (individually) can rule out type profiles of the remaining agents and, for at least one type of one agent, that agent has information about the remaining agents. Partitional information includes complete information as a special case. Existing results on complete information environments suggest that partitional information might simplify implementation problems. Within the context of an applied agency model in which capacity is constrained, we provide results that seem to challenge this intuition.Journal of Economic LiteratureClassification Numbers: C72, D82.     

启蒙的主体

启蒙既不是一个凌驾于所有人之上的理性的纯粹运动，也不是人类的一个群体对另一个群体，一个族类对另一个族类，一个人对另一个人的教化。每一个个体作为自为者都是启蒙的主体；与此同时，每个主体对于任何另外一个主体都可以是，或者应当是一个批判性的主体。     

Strategic transmission of information and short-term commitment

Summary. We examine the strategic role of information transmission in a repeated principal-agent relationship where the agent produces information that is useful to the principal. The agent values continuous employment for the principal because he makes a relationship-specific investment that can yield rents to him when the relationship is renewed. Assuming that the parties are sufficiently impatient, we show that full disclosure of the information produced occurs early in the relationship when the principal can commit to a long-term relationship, when the agent observes his valuation of continuous employment after making a report on information produced, or when the agent obtains a low valuation of continuous employment before making a report. By contrast, a strategic delay in the transmission of information occurs when the principal can only commit to a short-term relationship and the agent obtains a high valuation of continuous employment before making a report. Received: October 15, 1997; revised version: July 27, 1998     

Consumption dynamics in general equilibrium: A characterisation when markets are incomplete

We introduce a methodology for analysing infinite horizon economies with two agents, one good, and incomplete markets. We provide an example in which an agent's equilibrium consumption is zero eventually with probability one even if she has correct beliefs and is marginally more patient. We then prove the following general result: if markets are effectively incomplete forever then on any equilibrium path on which some agent's consumption is bounded away from zero eventually, the other agent's consumption is zero eventually—so either some agent vanishes, in that she consumes zero eventually, or the consumption of both agents is arbitrarily close to zero infinitely often. Later we show that (a) for most economies in which individual endowments are finite state time homogeneous Markov processes, the consumption of an agent who has a uniformly positive endowment cannot converge to zero and (b) the possibility that an agent vanishes is a robust outcome since for a wide class of economies with incomplete markets, there are equilibria in which an agent's consumption is zero eventually with probability one even though she has correct beliefs as in the example. In sharp contrast to the results in the case studied by Sandroni (2000) [29] and Blume and Easley (2006) [8] where markets are complete, our results show that when markets are incomplete not only can the more patient agent (or the one with more accurate beliefs) be eliminated but there are situations in which neither agent is eliminated.     

The Economics of Clear Advice and Extreme Options

I study a principal–agent model in which the agent collects information and then chooses a verifiable action. I show that the principal can find it desirable to constrain the agent's action set even though there is no disagreement about the ranking of actions ex post . The elimination or penalization of „intermediate” actions, which are optimal when information is poor, improves incentives for information collection. I characterize optimal action sets when the agent is infinitely risk averse with respect to income shocks and optimal incentive schemes when the agent is risk neutral.     

On the Non-Contractual Nature of Donor–Recipient Interaction in Development Assistance

The author analyzes three issues in strategic donor–recipient interaction motivated by the complexity of the rationale underlying aid. The first is when we have several principals with conflicting objectives. Any one principal cannot offer high powered incentives to the agent to carry out his or her designated task. The second is to do with the fact that effort associated with ensuring aid effectiveness may concern both principal and agent, the optimal solution to which requires cooperative behavior that is difficult to design. Consequently, the contractual type principal–agent relationship between donors and recipients is inappropriate. We need to consider models that signal recipient quality or commitment to reform. Thus, thirdly, a simple model of signaling with commitment problems is presented, along with extensions to multiple types of agent and time periods, as well as possible solutions involving mechanism design.     

SCREENING ETHICS WHEN HONEST AGENTS CARE ABOUT FAIRNESS*

A principal faces an agent with private information who is either honest or dishonest. Honesty involves revealing private information truthfully if the probability that the equilibrium allocation chosen by an agent who lies is small enough. Even the slightest intolerance for lying prevents full ethics screening whereby the agent is given proper incentives if dishonest and zero rent if honest. Still, some partial ethics screening may allow for taking advantage of the potential honesty of the agent, even if honesty is unlikely. If intolerance for lying is strong, the standard approach that assumes a fully opportunistic agent is robust.     

Coordination and discrimination in contracting with externalities: divide and conquer?

The paper studies bilateral contracting between N agents and one principal, whose trade with each agent generates externalities on other agents. It examines the effects of prohibiting the principal from (i) coordinating agents on her preferred equilibrium, and (ii) making different contracts available to different agents. These effects depend on whether an agent is more or less eager to trade when others trade more. The prohibitions reduce the aggregate trade in the former case, and have little or no effect in the latter case. The inefficiencies under different contracting regimes are linked to the sign of the relevant externalities, and are shown to be typically reduced by both prohibitions.