Misperceptions, moral hazard, and incentives in groups

Author / Creator

Gaynor, Martin

Available as

Online

Summary

Abstract: Recent work has shown that, in the presence of moral hazard, balanced budget Nash equilibria in groups are not pareto-optimal. This work shows that when agents misperceive the effects of ...

Abstract: Recent work has shown that, in the presence of moral hazard, balanced budget Nash equilibria in groups are not pareto-optimal. This work shows that when agents misperceive the effects of their actions on the joint outcome, there exist a set of sharing rules which balance the budget and lead to a pareto-optimal Nash equilibria.

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