The compromise game: two-sided adverse selection in the laboratory
In: Discussion paper series 6103
In: Public policy
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In: Discussion paper series 6103
In: Public policy
In: Journal of political economy, S. 000-000
ISSN: 1537-534X
In: CEPR Discussion Paper No. DP16683
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In: CEPR Discussion Paper No. DP12253
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Working paper
In: The economic journal: the journal of the Royal Economic Society, Band 118, Heft 531, S. 1453-1473
ISSN: 1468-0297
In: American economic review, Band 98, Heft 4, S. 1312-1346
ISSN: 1944-7981
Based on recent neuroscience evidence, we model the brain as a dual-system organization subject to three conflicts: asymmetric information, temporal horizon, and incentive salience. Under the first and second conflicts, we show that the uninformed system imposes a positive link between consumption and labor at every period. Furthermore, decreasing impatience endogenously emerges as a consequence of these two conflicts. Under the first and third conflicts, it becomes optimal to set a consumption cap. Finally, we discuss the behavioral implications of these rules for choice bracketing and expense tracking, and for consumption over the life cycle. (JEL D11, D74, D82, D87, D91)
In: The economic journal: the journal of the Royal Economic Society, Band 118, Heft 530, S. 845-874
ISSN: 1468-0297
In: American economic review, Band 98, Heft 2, S. 175-180
ISSN: 1944-7981
In: The Rand journal of economics, Band 38, Heft 4, S. 931-947
ISSN: 1756-2171
An individual (the leader) with free access to information decides how much public evidence to collect. Conditional on this information, another individual with conflicting preferences (the follower) undertakes an action that affects the payoff of both players. In this game of incomplete but symmetric information, we characterize the rents obtained by the leader as a result of his control of the generation of public information. These rents capture the degree of influence exerted by a chairman on a committee from his capacity to keep discussions alive or call a vote. Similar insights are obtained if the leader decides first how much private information he collects, and then how much verifiable information he transmits to the follower.
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Working paper
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Working paper