Browsing Department of Economics by Subject "Adverse selection"
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Item Open AccessMultiprincipals multiagents incentive design(Springer, 2001) Kerschbamer, R.; Koray, S.This paper studies a simple setting in which the contractual arrangements which determine the incentives for agents are not designed by a single central planner, but are themselves the outcome of a game among multiple non-cooperatively acting principals. The notion of an Epsilon Contracting Equilibrium is introduced to predict the outcome of the contract-design game among principals. Symmetric pure strategy Epsilon Contracting Equlibria may not exist in perfectly symmetric environments. In a symmetric Epsilon Contracting Equilibrium in mixed strategies coordination failure may lead to a suboptimal institutional network in which the agents "cheat" their principals. © Springer-Verlag 2001. Item EmbargoNonexclusive competition for a freelancer under adverse selection(Elsevier BV, 2022-09-30) Bayrak, Halil İbrahim; Dalkıran, Nuh Aygün; Bayrak, Halil İbrahim; Dalkıran, Nuh AygünA freelancer with a time constraint faces offers from multiple identical parties. The quality of the service provided by the freelancer can be high or low and is only known by the freelancer. The freelancer’s time cost is strictly increasing and convex. We show that a pure-strategy equilibrium exists if and only if the preferences of the high-type freelancer satisfy one of the following two distinct conditions: the high-type freelancer does not prefer providing his services for a price equal to the expected quality at the no-trade point; the high-type freelancer prefers providing his services for a price equal to the expected quality at any feasible trade point. If holds, then in equilibrium, the high-type freelancer does not trade, whereas the low-type may not trade, may trade efficiently, or may exhaust all of his capacity. Moreover, the buyers make zero profit from each of their traded contracts. If holds, then both types of the freelancer trade at the capacity in equilibrium. Furthermore, the buyers make zero expected profit with cross-subsidization. In any equilibrium, the aggregate equilibrium trades are unique. Our results extend to the case where the freelancer has more than two types if the buyers are restricted to offering concave tariffs. Item Open AccessOrder of limits in reputations(Springer, 2016) Dalkıran, N. A.The fact that small departures from complete information might have large effects on the set of equilibrium payoffs draws interest in the adverse selection approach to study reputations in repeated games. It is well known that these large effects on the set of equilibrium payoffs rely on long-run players being arbitrarily patient. We study reputation games where a long-run player plays a fixed stage-game against an infinite sequence of short-run players under imperfect public monitoring. We show that in such games, introducing arbitrarily small incomplete information does not open the possibility of new equilibrium payoffs far from the complete information equilibrium payoff set. This holds true no matter how patient the long-run player is, as long as her discount factor is fixed. This result highlights the fact that the aforementioned large effects arise due to an order of limits argument, as anticipated. Â© 2016, Springer Science+Business Media New York.