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on Project, Program and Portfolio Management |
| By: | Yuanyuan Li (University of Bielefeld - University of Bielefeld, CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique); Bertrand Wigniolle (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics) |
| Abstract: | In this paper, we propose a new mechanism able to explain the occurrence of credit crunches. Considering a credit market with an asymmetry of information between borrowers and lenders, we assume that borrowers have to pay a cost to reveal information on the quality of their project. They decide to be transparent if it is necessary for getting a loan or for paying a lower interest rate. Two types of competitive equilibria may exist: an opaque equilibrium in which all projects receive funding without revealing information; a transparent one in which only the best projects reval information and receive funding. It is also possible to get multiple equilibria. Incorporating this microeconomic mechanism in an OLG model, the economy may experience fluctuations due to the change of regime, and indeterminacy may occur. |
| Keywords: | endogenous information revelation,credit crunch |
| Date: | 2016–01 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:halshs-01277539&r=ppm |
| By: | Ester Manna (Universitat de Barcelona); Alessandro De Chiara (Central European University) |
| Abstract: | We consider a model in which a principal may delegate the choice of a project to a better informed agent. The preferences of the agent and the principal about which project should be undertaken can be discordant. Moreover, the agent benefits from being granted more discretion in the project choice and may be motivated by reciprocity. We find that the impact of the agent's reciprocity on the discretion he receives crucially depends on the conflict of interest with the principal. If preferences are very discordant, the principal is more likely to retain authority about the choice of the project when the agent is more reciprocal. Hence, reciprocity exacerbates a severe conflict of interest. In contrast, if preferences are more congruent, discretion is broader when the agent is more reciprocal. Hence, reciprocity mitigates a mild conflict of interest. In addition, we find that the possibility of being able to offer monetary payments to the agent can make the principal worse off when the agent reciprocates. We also empirically test the predictions of our model using the German Socio-Economic Panel finding some support for our theoretical results. |
| Keywords: | Authority, Delegation, Reciprocity. |
| JEL: | D03 D82 D83 D86 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:ewp:wpaper:346web&r=ppm |
| By: | Aldy, Joseph E. (Harvard University) |
| Abstract: | The emerging pledge and review approach to international climate policy provides countries with substantial discretion in how they craft their intended emission mitigation contributions. The resulting heterogeneity in mitigation pledges creates a significant demand for a well-functioning transparency and review mechanism. In particular, the specific forms of intended contributions necessitate economic analysis in order to estimate the aggregate effects of these contributions, as well as to permit "apples-to-apples" comparisons of mitigation efforts. This paper discusses the tools that can inform such analyses, as well as the institutional framework needed to support climate transparency. In light of the negotiating challenges with respect to transparency, the paper describes the potential for countries to implement Living Mitigation Plans that include regular updating of domestic mitigation programs with data and analyses on their outcomes. Such Living Mitigation Plans can serve as the foundation for independent, expert review of domestic mitigation programs. Moreover, they can include the inputs necessary to assess the mitigation value of domestic mitigation efforts. Such assessments could inform the linkage of domestic mitigation policies, especially among disparately designed mitigation policies. |
| Date: | 2015–11 |
| URL: | http://d.repec.org/n?u=RePEc:ecl:harjfk:15-068&r=ppm |