nep-cta New Economics Papers
on Contract Theory and Applications
Issue of 2014‒10‒17
three papers chosen by
Simona Fabrizi
Massey University

  1. Transparency in Public Life. A Quantum Cognition Perspective By Ariane Lambert-Mogiliansky; François Dubois
  2. Accountability and transparency as learning processes in private, public and global governance. By Rodolfo Apreda
  3. Quality Provision in the Presence of a Biased Intermediary By Alexandre de Cornière; Greg Taylor

  1. By: Ariane Lambert-Mogiliansky (PSE - Paris-Jourdan Sciences Economiques - CNRS : UMR8545 - École des Hautes Études en Sciences Sociales (EHESS) - École des Ponts ParisTech (ENPC) - École normale supérieure [ENS] - Paris - Institut national de la recherche agronomique (INRA), EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris); François Dubois (LM-Orsay - Laboratoire de Mathématiques d'Orsay - CNRS : UMR8628 - Université Paris XI - Paris Sud, CNAM Ile de France - Conservatoire National des Arts et Métiers - Conservatoire National des Arts et Métiers [CNAM])
    Abstract: In this paper we investigate the implications of assuming that citizens are cognitively constrained for transparency in public life. We model cognitive limitations as reflecting a quantum property of people's mental representations of the world. There exists a multiplicity of incompatible (Bohr) complementary mental representations of a situation. As a consequence the framing of information plays a crucial role. We show that additional information can be detrimental to a quantum cognitively constrained agent: he may become more confused.
    Keywords: Learning ; Quantum cognition ; Transparency
    Date: 2014–09
  2. By: Rodolfo Apreda
    Abstract: This paper argues that accountability in organizations should not be constrained to responsibilities alone, but it must also comprise the previous commitments without which responsibilities remain meaningless. It also asserts that transparency should not be merely predicated upon the production of information but be focused instead on stakeholders who lay claim to their essential rights of being informed. Afterwards, it deals with a learning-process approach that brings to light the prime linkage between accountability and transparency in the building of private, public and global governance.
    Keywords: accountability, transparency, learning processes, governance, commitments, responsibilities.
    JEL: G34 G38 H83
    Date: 2014–10
  3. By: Alexandre de Cornière (Department of Economics and Nuffield College, University of Oxford, 1 New Road, Oxford OX1 1NF); Greg Taylor (Oxford Internet Institute, University of Oxford, 1 St Giles, Oxford OX1 3JS)
    Abstract: In many industries, consumers rely on recommendations by an intermediary when choosing between competing products. In this paper, we look at how the existence of contracts between firms and intermediaries affects the quality of the advice received by consumers, and firms' incentives to invest in improving the quality of their products. We consider a model with one intermediary and two firms who decide how much to invest. Under a variety of contractual environments (vertical integration, ex post endorsement) we show that, even though the intermediary tends to endorse the best firm, contractual endorsement distorts firms' incentives to invest. Quality can then decrease or increase compared to an objective benchmark. We contrast our approach to a setup with fixed qualities and endogenous prices, under which contractual endorsement hurts consumers.
    Keywords: intermediary, quality, bias
    JEL: L1 L4 L86
    Date: 2014–09

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