gathering information before signing a contract a screening perspective a principal has to choose among several agents to fulfill a task and then provide the right incentives to perform it agents do not a priori know how competent they are for the task it is shown that the principal should propose a contract that leads the agents to gather information about their competence prior to signing the contract this insight is in sharp contrast with cremer and khalil j cremer f khalil gathering information before signing a contract american economic review 82 1992 566 578 who consider a setup with one agent or alternatively a setup with several agents in which the private information commonly applies to all agents it emerges because in our private value setup information acquisition accompanied by a proper screening device increases the chance that the principal will pick a competent agent c 2006 elsevier b v all rights reserved

gathering imperfect information before signing a contract i study information gathering for rent seeking purposes in contracting in my model an agent learns his payoff type only after accepting a contract but can at costs acquire imperfect information while deliberating whether to accept i show that the principal deters the acquisition if and only if the costs are high the result stands in contrast to a finding by cremer and khalil 1992 who demonstrate that the acquisition of perfect information will always be deterred a key insight is that the case of imperfect information is an instance of a sequential screening problem

the effect of coastal land use restrictions on housing prices a repeat sale analysis abstract in 1986 the critical areas commission of the state of maryland established a set of land use restrictions that limit residential development on land abutting the chesapeake bay in this paper 1 estimate the effect of these restrictions on housing prices in one county on the bay i use a repeat sale analysis inferring the effect of restrictions by observing price changes on houses that sold both before and after the restrictions were enacted housing prices in the critical area with water frontage increased by 46 62 due to restrictions housing prices in the critical area without frontage increased by 14 27 and prices near but not in the critical area increased by 13 21

empirical evidence on inflation expectations in the new keynesian phillips curve abstract we review the main identification strategies and empirical evidence on the role of expectations in the new keynesian phillips curve paying particular attention to the issue of weak identi

progressive screening long term contracting with a privately known stochastic process we examine a model of long term contracting in which the buyer is privately informed about the stochastic process by which her value for a good evolves in addition the realized values are also private information we characterize a class of environments in which the profit maximizing long term contract offered by a monopolist takes an especially simple structure we derive sufficient conditions on primitives under which the optimal contract consists of a menu of deterministic sequences of static contracts within each sequence higher realized values lead to greater quantity provision however an increasing proportion of buyer types are excluded over time eventually leading to inefficiently early termination of the relationship moreover the menu choices differ by future generosity with more costly up front plans guaranteeing greater quantity provision in the future thus the seller screens process information in the initial period and then progressively screens across realized values so as to reduce the information rents paid in future periods copyright oxford university press

optimal auctions with information acquisition this paper studies optimal auction design in a private value setting with endogenous information acquisition first we develop a general framework for modeling information acquisition when a seller wants to sell an object to one of several potential buyers who can each gather information about their valuations prior to participation we then show that under certain conditions standard auctions with a reserve price remain optimal but the optimal reserve price lies between the mean valuation and the standard reserve price in myerson 1981 we provide sucient conditions under which the value of information to the seller is positive and also characterize the necessary and sucient conditions under which equilibrium information acquisition in private value auctions is socially excessive the key to the analysis is the insight that buyer incentives to acquire information become stronger as the reserve price moves toward the mean valuation

optimal procurement contracts with pre project planning the paper studies procurement contracts with pre project investigations in the presence of adverse selection and moral hazard to model the procurer s problem we extend a standard sequential screening model to endogenous information acquisition with moral hazard the optimal contract displays system atic distortions in information acquisition due to a rent effect adverse selection induces too much infor mation acquisition to prevent cost overruns and too little information acquisition to prevent false project cancellations moral hazard mitigates the distortions related to cost overruns yet exacerbates those related to false negatives the optimal mechanism is a menu of option contracts that achieves the dual goal of providing incentives for information acquisition and truthful information revelation

contracts with endogenous information abstract i study covert information acquisition and reporting in a principal agent problem allowing for general technologies of information acquisition when posteriors satisfy two dimensional versions of the standard first order stochastic dominance and concavity convexity of the distribution function conditions a first order approach is justified under the same conditions informativeness and riskiness of reports are equivalent high powered contracts that make the agent s informational rents more risky are used to increase incentives for information acquisition insensitive contracts are used to reduce incentives for information gathering the value of information to the agent is always positive the value of information to the principal is ambiguous

deflation risk in the euro area and central bank credibility abstract we analyze a new option based indicator of market perceptions of euro area deflation risks we find that during 2010 2015 long term deflation risks became slightly more sensitive to oil price changes and inflation surprises suggesting a subtle weakening in anchoring

zoning and the distribution of location rents an empirical analysis of harris county texas the coase theorem presents two criteria for evaluating regulation regulations efficiency relative to private solutions and how the regulation affects the distribution of wealth previous studies of the impact of municipal zoning have focused on coase s first criteria whether zoning raises land values overall this study estimates the transfer of wealth between owners of existing homes that results from the creation of a municipal zoning ordinance we find that property best suited to residential use gains in value while property with relatively higher potential as commercial property experiences a decline in the value we find that zoning is distributive

on the theory of growth controls numerous empirical studies have examined the effect of growth controls on housing prices these studies have used many different techniques ranging from hedonic price model estimation to paired comparisons but have all come to the same conclusion growth controls raise the price of housing in theory there are both demand and supply side explanations which need not be mutually exclusive for these observed price differences on the supply side housing caps zoning restrictions limitations on the amount of developable land and other forms of growth control may reduce the supply of housing over time this in turn may produce scarcity effects which manifest as shifts or other changes in the housing supply curve and attendant price increases on the demand side to the extent that growth controls may reduce or internalize expected negative externalities and or congestion costs associated with growth controls may also produce amenity effects such amenity effects manifest as changes in the demand curve and likewise may be capitalized in land values and wages e g the price of a house rises as commute time falls

discriminatory information disclosure we consider a price discrimination problem in which a seller has a single object for sale to a potential buyer at the time of contracting the buyer s private type is his incomplete private information about his value and the seller can disclose additional private information to the buyer we study the question of whether discriminatory information disclosure can be protable to the seller under the assumption that for the same disclosure policy the amount of additional private information that the buyer can learn depends on his private type we establish sucient conditions under which it is prot maximizing for the seller to grant each private type of the buyer full access to all additional private information under her control in general however discriminatory disclosure can be optimal because it reduces the information rent accrued to private types of the buyer without much impact on the trade surplus

the public demand for open space the case of connecticut communities abstract at both the state and national levels public policies are being designed to stimulate the demand for locally owned open space yet very little is known about the factors that influence the demand for open space and the sensitivity of demand to price and income to fill the void this study uses data for connecticut cities and towns to estimate the public demand for open space the empirical results suggest that the demand for open space is relatively insensitive to changes in price but highly responsive to changes in income the findings also show that federal and state open space may tend to crowd out locally owned open space and that locally owned open space represents a highly congestable good finally the analysis indicates that privately owned open space is not a good substitute for locally owned public open space

gathering information before signing a contract after being offered a contract an agent has the possibility to observe the state of nature this enables him to refuse the contract in unfavorable states but burdens him with an observation cost the authors show that the principal offers a contract in which the agent has no incentive to observe the state of nature and they explore its terms later they show that the principal finds it profitable to organize competition between several agents even though he has monopoly power and can push a single agent down to his reservation utility copyright 1992 by american economic association

combining revealed and stated data to examine housing decisions using discrete choice analysis abstract this paper uses stated preference and revealed preference data separately and jointly to examine individuals housing choices in particular it combines an established revealed preference approach discrete choice analysis of actual housing purchases and a relatively new stated preference approach choice based conjoint analysis of hypothetical housing purchases to provide us with a better understanding of the factors driving housing decisions these methods are appropriately combined since they reflect the same decision process households select the dwelling that provides the best combination of attributes from the feasible set of alternatives in total this paper analyzes three data sets only actual housing purchases only hypothetical housing purchases and both types of purchases combined analysis finds that actual and hypothetical housing purchases are similar decision processes with respect to some attributes yet are dissimilar with respect to other attributes nevertheless combining the two types of data improves identification of both categories of attributes journal of economic literature classification number r21

information management in incentive problems we extend the standard procurement model to examine how an agent is optimally induced to acquire valuable planning information before he choose an unobservable level of cost reducing effort concer

explaining the vote for slow growth a model of equilibrium rent determination is developed to incorporate both the scarcity and amenity effects associated with limits to new housing construction in a non open city where demand for housing has increased implications of the model are tested with data from california cities to determine which factors increase the probability that a local growth control ballot measure is proposed or passed it is found that limits to new housing development occur with greater frequency in communities where fewer substitute cities exist and where certain socioeconomic characteristics predominate but not where current population densities or growth are high

building codes and land values in high hazard areas vacant land prices on florida s barrier islands are examined under four coastal building regulatory regimes a hedonic pricing model features 1 745 vacant residential land sales from five barrier islands in lee county between 1980 and 1993 we find that land values decrease in response to the county s participation in the national flood insurance program the establishment of a coastal building zone and following the reestablishment of the coastal construction control line the findings suggest that benefits of safety from increased building standards are outweighed by the additional costs of compliance brought about by the code changes

gathering information before the contract is offered the case with two states of nature abstract focusing on a baron myerson model with two states of nature in the first part of the paper we study the contract that a principal would offer to an agent when he does not know whether the agent is informed or not about the state of nature in the second we endogenize the information of acquisition and show that in equilibrium a baron myerson type contract will never be offered

deflation and monetary policy in a historical perspective remembering the past or being condemned to repeat it inflation is currently low and stable in industrialized countries but might deflation replace inflation as a major policy concern we present a broad cross country historical study of deflation over the past two centuries in order to shed light on current policy challenges in the light of the relevant theoretical approaches we empirically characterize good bad and ugly deflations assess similarities between the current low inflation environment and that of the gold standard period and discuss lessons from the historical record as to policies to escape undesirable deflation and the relative merits of interest rate and monetary instruments michael bordo and andrew filardo

long term contracting with markovian consumers to study how a firm can capitalize on a long term customer relationship we characterize the optimal contract between a monopolist and a consumer whose preferences follow a markov process the optimal contract is nonstationary and has infinite memory but is described by a simple state variable under general conditions supply converges to the efficient level for any degree of persistence of the types and along any history though convergence is history dependent in contrast as with constant types the optimal contract can be renegotiation proof even with highly persistent types these properties provide insights into the optimal ownership structure of the production technology

the impact of rental properties on the value of single family residences abstract this study examines the effects that single family rental properties in a residential neighborhood have on the value of single family residences in that area the analysis blends real estate valuation concepts with evidence found in the housing maintenance literature and urban succession theory to develop testable hypotheses regarding the property specific proximity related and neighborhood wide impacts of rental properties on property values the data used to test the hypotheses include the tenure status of 23 119 single family residences and 1 162 single family sales regression results support all three hypotheses although numerous studies on the value impacts of other externalities have been published this is the first study to examine the separation of property rights the results of this study provide additional insights into housing maintenance and also have implications for neighborhood zoning regulations

elements of an economic justification for municipal zoning abstract the possibility that externalities will produce a nonconvexity in the social production set limits the application of both the coase and pigou solutions for achieving an optimal allocation of land resources conditions on relative land prices are derived which indicate that external effects are strong enough to introduce a nonconvexity into the production set these conditions were not fulfilled in a sample of single family and multifamily dwellings in foster city california this does not preclude the possibility that they are fulfilled in cases of more severe external effects

evidence on the specification of price in the study of domestic water demand the development of lakefront property in northern wisconsin has prompted in several towns minimum frontage zoning stricter than the state standard such zoning generates an economic loss by constraining development development effect and an economic

the economics of options implied inflation probability density functions recently a market in options based on cpi in ation in ation caps and oors has emerged in the us this paper uses quotes on these derivatives to construct probability densities for in ation we study how these pdfs respond to news announcements and nd that the implied odds of de ation are sensitive to certain macroeconomic news releases we compare the option implied probability densities with those obtained by time series methods and use this information to construct empirical pricing kernels the options implied densities assign considerably more mass to extreme in ation outcomes either de ation or high in ation than do their time series counterparts this yields a u shaped empirical pricing kernel with investors having high marginal utility in states of the world characterized by either de ation or high in ation

optimal sales contracts with withdrawal rights we introduce ex post participation constraints in the standard sequential screening model this captures the presence of consumer withdrawal rights as for instance mandated by european union regulation of distance sales contracts with such additional constraints the optimal contract is static and unlike with only ex ante participation constraints does not elicit the agent s information sequentially this holds whenever differences in ex ante and ex post outside options are below a positive upper bound welfare effects of mandatory withdrawal rights are ambiguous since it is insufficient in our setting to consider only local incentive constraints we develop a novel technique to identify the relevant global constraints

optimal information disclosure in auctions and the handicap auction we analyze a situation where a monopolist is selling an indivisible good to risk neutral buyers who only have an estimate of their private valuations the seller can release without observing certain additional signals that affect the buyers valuations our main result is that in the expected revenue maximizing mechanism the seller makes available all the information that she can and her expected revenue is the same as it would be if she could observe the part of the information that is new to the buyers we also show that this mechanism can be implemented by what we call a handicap auction in interesting applications in the first round of this auction each buyer picks a price premium from a menu offered by the seller a smaller premium costs more then the seller releases the additional signals in the second round the buyers bid in a second price auction where the winner pays the sum of his premium and the second highest non negative bid in the case of a single buyer this mechanism simplifies to a menu of european call options