Principal-agent contracts in continuous time asymmetric information models the importance of large continuing information flows

1996 ◽  
Vol 29 (3) ◽  
pp. 523-535 ◽  
Author(s):  
William A. Brock ◽  
Lewis T. Evans
Keyword(s):  
Asymmetric Information ◽  
Continuous Time ◽  
Principal Agent ◽  
Information Flows ◽  
Information Models

Indian Principal-Agent Theory, Or, How Varuṇa Helps the King to be Just

2016 ◽  
Vol 70 (2) ◽  
Author(s):  
Harald Wiese
Keyword(s):  
Asymmetric Information ◽  
Principal Agent ◽  
Principal Agent Theory ◽  
Agent Theory

AbstractEconomic principal-agent theory deals with asymmetric information. It has two aspects. (i) If one person is better informed than another one, the former may outwit the latter.

scholarly journals Contribution of worker participation to increase the efficiency of firms

2004 ◽  
Vol 35 (3) ◽  
pp. 23-29
Author(s):  
P. De Villiers ◽  
G. Kooy
Keyword(s):  
South Africa ◽  
Asymmetric Information ◽  
Principal Agent ◽  
Worker Participation ◽  
Principal Agent Problem ◽  
Conditions Of Employment ◽  
Increase Efficiency

There are many factors that may lead to inefficiencies in a firm. One reason is the existence of a principal-agent problem. Linked with this problem is asymmetric information, unaligned motives of principals and agents, distrust (that was rampant in the era of apartheid in South Africa, but more recently the Basic Conditions of Employment Act can fulfil this role) and conflict. Worker participation schemes can help to alleviate this problem and different forms of worker participation schemes are discussed that can increase efficiency of firms.

Blocking Coalitions and Fairness in Asset Markets and Asymmetric Information Economies

2019 ◽  
Vol 20 (1) ◽  
Author(s):  
Anuj Bhowmik ◽  
Maria Gabriella Graziano
Keyword(s):  
Asymmetric Information ◽  
Status Quo ◽  
Veto Power ◽  
Asset Markets ◽  
The Core ◽  
Information Models ◽  
The Status ◽  
Initial Improvement ◽  
Core Allocations ◽  
Asymmetric Information Economies

AbstractThis paper analyses two properties of the core in a two-period exchange economy under uncertainty: the veto power of arbitrary sized coalitions; and coalitional fairness of core allocations. We study these properties in relation to classical (static) and sequential (dynamic) core notions and apply our results to asset markets and asymmetric information models. We develop a formal setting where consumption sets have no lower bound and impose a series of general restrictions on the first period trades of each agent. All our results are applications of the same lemma about improvements to an allocation that is either non-core or non-coalitionally fair. Roughly speaking, the lemma states that if all the members of a coalition achieve a better allocation in some way (for instance, by blocking the status quo allocation or because they envy the net trade of other coalitions) then an alternative improvement can be obtained through a perturbation of the initial improvement.

Implications of government subsidies for waste cooking oil considering asymmetric information

Kybernetes ◽  
2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Rui Yang ◽  
Wansheng Tang ◽  
Jianxiong Zhang
Keyword(s):  
Asymmetric Information ◽  
Conversion Rate ◽  
Waste Cooking Oil ◽  
Principal Agent ◽  
High Type ◽  
Content Type ◽  
Cooking Oil ◽  
Incentive Effects ◽  
The Government ◽  
Uncertainty Level

Purpose Without proper treatment, waste cooking oil (WCO) will bring serious environmental and health hazards, which can be effectively alleviated by converting it into biofuel. Subsidies from the government usually play a significant role in encouraging recycling activities and supporting sustainable supply chain. This paper aims to quantitatively investigate the incentive effects of government subsidies under asymmetric information. Design/methodology/approach This paper applies the principal–agent contract to compare the incentive effects of the two widely used subsidy modes (raw material price subsidy [MS] and finished product sale subsidy [FS]) in a management system which consists of the government and a bio-firm where the bio-firm’s conversion rate of the WCO remains as private information. Findings Results indicate that the two subsidy modes have the same performance under symmetric information, while under asymmetric information, the government always prefers the MS mode which is more environment-friendly. Besides, if the average conversion rate is large or the uncertainty level of the asymmetric information is moderate, the MS mode is Pareto-improving compared with the FS mode for the government and the high-type bio-firm. Only when the average conversion rate is small or the uncertainty level is very small/very large, the high-type bio-firm welcomes the FS mode. Originality/value Different from the existing literature, this paper applies the principal–agent contract into the WCO management system and quantitatively compares the two subsidy modes taking the practical problem of asymmetric information into consideration.

Taking Sides in Wars of Attrition

2017 ◽  
Vol 111 (2) ◽  
pp. 219-236 ◽  
Author(s):  
ROBERT POWELL
Keyword(s):  
Asymmetric Information ◽  
Continuous Time ◽  
Formal Analysis ◽  
Third Parties ◽  
The Other ◽  
Third Party ◽  
War Of Attrition ◽  
The Third ◽  
Boomerang Effect ◽  
Formal Framework

Third parties often have a stake in the outcome of a conflict and can affect that outcome by taking sides. This article studies the factors that affect a third party's decision to take sides in a civil or interstate war by adding a third actor to a standard continuous-time war of attrition with two-sided asymmetric information. The third actor has preferences over which of the other two actors wins and for being on the winning side conditional on having taken sides. The third party also gets a flow payoff during the fighting which can be positive when fighting is profitable or negative when fighting is costly. The article makes four main contributions: First, it provides a formal framework for analyzing the effects of endogenous intervention on the duration and outcome of the conflict. Second, it identifies a “boomerang” effect that tends to make alignment decisions unpredictable and coalitions dynamically unstable. Third, it yields several clear comparative-static results. Finally, the formal analysis has implications for empirical efforts to estimate the effects of intervention, showing that there may be significant selection and identification issues.

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