In a simple model of borrowing and lending with asymmetric information we show that the optimal, incentive-compatible debt contract is the standard debt contract. The second-best level of investment never exceeds the first-best and is strictly less when there is a positive probability of costly

theoretical conclusion is that licensing by means of royalty is never the optimal policy for the innovator. In particular, royalty licensing is inferior to other policies like auction or charging only a fixed fee, and it is In practice, licensing contracts of technological innovations take various diverse forms, but they can be classified into three broad categories: licensing bymeans of an output-based royalty, a lump-sum upfront fee, and combination of the two. The theoretical literature on patent licensing has mainly considered outsider

We consider locally incentive compatible mechanisms with deterministic allocation rules and transfers with quasilinear utility. We identify a rich class of type spaces, which includes the single peaked type space, where local incentive compatibility does not imply incentive compatibility. Our main

We examine a general equilibrium model with asymetrically informed agents. The presence of asymmetric information generally presents a conflict between incentive compatibility and Pareto efficiency. We present a notion of informational size and show that the conflict between incentive compatibility

Abstract. We formalize the definition of symmetric auctions to study fundamental properties of incentive compatible auction protocols. We characterize such auction protocols for those with a fixed number of items to sell and study some important properties of those with an indefinite number

, and fully characterize the conditions under which incentive compatible ranking systems exist, demonstrating that in general no such system satisfying all the properties exists.

by banks. This paper discusses the incentive-compatible design and interaction of both components of the financial safety net and describes and compares three countries with different safety net arrangements: Germany, Brazil and Russia.

that avoid these problems by installing a trusted intermediary which forwards the payment to the seller only if the buyer acknowledges that the good arrived in the promised condition. We address the incentive issues that arise and design an escrow mechanism that is incentive compatible, efficient, interim

COMMENTS ARE WELCOME. We aim at comprehensively analyzing the incentive compatibility of adaptation funding. We examine the robustness of the result of Buob and Stephan (2009) in a more general framework by analyzing different sequences of the decision-making of adaptation funding in a non

Traditional centralised approaches to security are difficult to apply to large, distributed marketplaces in which software agents operate. Developing a notion of trust that is based on the reputation of agents can provide a softer notion of security that is sufficient for many multi-agent applications. In this paper, we address the issue of incentivecompatibility (i.e. how to make it optimal for agents to share reputation information truthfully), by introducing a sidepayment scheme, organised through a set of broker agents, that makes it rational for software agents to truthfully share the reputation information they have acquired in their past experience. We also show how to use a cryptographic mechanism to protect the integrity of reputation information and to achieve a tight bounding between the identity and reputation of an agent. 1.