The purpose of this paper is to study the kind of e‰cient allocations that can be achieved in exchange economies with asymmetric information, by means of a decentralized mechanism robust to coalitional, strategic deviations. To this end, we define a new strategic equilibrium concept – called strong collusion-proof contract – designed to characterize stable communication agreements in games with...

We study the effect of physician incentives in an HMO network. Physician incentives are controversial because they may induce doctors to make treatment decisions that differ from those they would chose in the absence of incentives. We set out a theoretical framework for assessing the degree to which incentive contracts do in fact induce physicians to deviate from a standard guided only by patie...

This paper develops a novel approach to estimate how contract and principal–agent characteristics influence post-auction outcome when the matching between agents principals derives from an auction process. We propose control-function account jointly for endogeneity of contracts matching. consists of, first, estimating primitives interdependent values model – which is shown be non-parametrically...

In this paper, a principal’s decision between delegating two tasks or handling one of the two tasks herself is analyzed. We assume that the principal uses both, formal contracts and informal agreements sustained by the value of future relationships (relational contracts) as incentive device. It is found that the principal is less likely to delegate both tasks in a dynamic setting than in a stat...

This paper derives optimal incentive contracts for agents with other-regarding preferences. It offers a behavioral explanation for the empirically observed lack of relative performance evaluation. We analyze a principal-multi agent model and assume that agents are inequity averse or status seeking. We show that team contracts can be optimal even if the agents’ performance measures are positivel...