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Best Experienced Payoff Dynamics and Cooperation in the Centipede Game
Theoretical Economics 14 (2019), 1347–1385 1555-7561/20191347 Best experienced payoff dynamics and cooperation in the centipede game William H. Sandholm Department of Economics, University of Wisconsin Segismundo S. Izquierdo BioEcoUva, Department of Industrial Organization, Universidad de Valladolid Luis R. Izquierdo Department of Civil Engineering, Universidad de Burgos We study population game dynamics under which each revising agent tests each of his strategies a fixed number of times, with each play of each strategy being against a newly drawn opponent, and chooses the strategy whose total payoff was highest. In the centipede game, these best experienced payoff dynamics lead to co- operative play. When strategies are tested once, play at the almost globally stable state is concentrated on the last few nodes of the game, with the proportions of agents playing each strategy being largely independent of the length of the game. Testing strategies many times leads to cyclical play. Keywords. Evolutionary game theory, backward induction, centipede game, computational algebra. JEL classification. C72, C73. 1. Introduction The discrepancy between the conclusions of backward induction reasoning and ob- served behavior in certain canonical extensive form games is a basic puzzle of game the- ory. The centipede game (Rosenthal (1981)), the finitely repeated prisoner’s dilemma, and related examples can be viewed as models of relationships in which each partic- ipant has repeated opportunities to take costly actions that benefit his partner and in which there is a commonly known date at which the interaction will end. Experimen- tal and anecdotal evidence suggests that cooperative behavior may persist until close to William H. -
Musharakah Agreement
Ref No: _____________ Musharakah Agreement THIS WAKALAH AGREEMENT is made on the day and year stated in Section 1 of the First Schedule, BETWEEN Name: ____________________________________________ Passport Number: ______________________ Country of Passport: __________________ Investor Type: ____________________ and includes his/her successors in title, heirs, personal representatives and permitted assigns (hereinafter referred to as the “Investor”) AND PT Esensi Prima Cipta ,Indonesia. (hereinafter referred to as the “Developer”). Each Investor and Developer may be referred to in this Agreement individually as a “Party” and collectively as the “Parties.” WHEREAS, the Investor desires to participate in the Project on a profit and loss sharing basis by providing the Developer with the Commitment Amount in accordance with the terms and conditions set forth in this Agreement; and WHEREAS, the Developer desires to participate in the Project on a profit and loss sharing basis by providing capital and by managing the Commitment Amount of the Investor in accordance with the terms and conditions set forth in this Agreement. NOW IT IS HEREBY AGREED as follows: 1. DEFINITIONS In this Agreement the following words and expressions shall, save where the context otherwise requires, have the following meanings: : The amount that the Investor has agreed to contribute in Commitment Amount the Project as described in Section 4 of the Appendix; PT Ethis Modal Indonesia Company : PT Esensi Prima Cipta (“Developer”); Developer : Indonesian Rupiah; IDR Unless -
Comparative Statics and Perfect Foresight in Infinite Horizon Economies
Digitized by the Internet Archive in 2011 with funding from Boston Library Consortium IVIember Libraries http://www.archive.org/details/comparativestatiOOkeho working paper department of economics Comparative Statics And Perfect Foresight in Infinite Horizon Economies Timothy J. Kehoe David K. Levine* Number 312 December 1982 massachusetts institute of technology 50 memorial drive Cambridge, mass. 02139 Comparative Statics And Perfect Foresight in Infinite Horizon Economies Timothy J. Kehoe David K. Levine* Number 312 December 1982 Department of Economics, M.I.T. and Department of Economics, U.C.L.A., respectively. Abstract This paper considers whether infinite horizon economies have determinate perfect foresight equilibria. ¥e consider stationary pure exchange economies with both finite and infinite numbers of agents. When there is a finite number of infinitely lived agents, we argue that equilibria are generically determinate. This is because the number of equations determining the equilibria is not infinite, but is equal to the number of agents minus one and must determine the marginal utility of income for all but one agent. In an overlapping generations model with infinitely many finitely lived agents, this reasoning breaks down. ¥e ask whether the initial conditions together with the requirement of convergence to a steady state locally determine an equilibrium price path. In this framework there are many economies with isolated equilibria, many with continue of equilibria, and many with no equilibria at all. With two or more goods in every period not only can the price level be indeterminate but relative prices as well. Furthermore, such indeterminacy can occur whether or not there is fiat money in the economy. -
Bad Agent, Good Citizen?
BAD AGENT, GOOD CITIZEN? Claire Hill,* Brett McDonnell** & Aaron Stenz*** INTRODUCTION Lawyers are agents for their principals—their clients.1 The Restatement (Third) of Agency sets forth an agent’s duty: “[A]n agent has a fiduciary duty to act loyally for the principal’s benefit in all matters connected with the agency relationship.”2 A good agent is a loyal agent. The Restatement also sets forth several important components of the duty: “An agent has a duty not to acquire a material benefit from a third party in connection with transactions conducted or other actions taken on behalf of the principal or otherwise through the agent’s use of the agent’s position.”3 Further, “[a]n agent has a duty not to deal with the principal as or on behalf of an adverse party in a transaction connected with the agency relationship.”4 A lawyer who violates these duties is a bad agent, in breach of her fiduciary duty of loyalty to her principal.5 Lawyers also have professional obligations to the broader society. Notably, they cannot help their clients commit crimes, nor can they be party to their client’s concealment of crimes.6 Even consistent with those obligations, and certainly in gray areas (such as avoiding inconvenient knowledge),7 whether they are being good agents or bad agents for their clients, lawyers can help—or harm—the broader society.8 * Professor and James L. Krusemark Chair in Law, University of Minnesota Law School. ** Dorsey & Whitney Chair in Law, University of Minnesota Law School *** J.D. Candidate, 2020, University of Minnesota Law School, This Article was prepared for the Colloquium on Corporate Lawyers, hosted by the Fordham Law Review and the Stein Center for Law and Ethics on October 11, 2019, at Fordham University School of Law. -
Chapter 8 Liability Based on Agency and Respondeat Superior A. Definitions
CHAPTER 8 LIABILITY BASED ON AGENCY AND RESPONDEAT SUPERIOR A. DEFINITIONS 8:1 Agency Relationship — Defined 8:2 Disclosed or Unidentified Principal — Defined 8:3 Undisclosed Principal — Defined 8:4 Employer and Employee — Defined 8:5 Independent Contractor — Definition 8:6 Loaned Employee 8:7 Loaned Employee ― Determination 8:8 Scope of Employment of Employee — Defined 8:9 Scope of Authority of Agent — Defined 8:9A Actual Authority 8:9B Express Authority 8:10 Incidental Authority — Defined 8:11 Implied Authority — Defined 8:12 Apparent Authority (Agency by Estoppel) — Definition and Effect 8:13 Scope of Authority or Employment — Departure 8:14 Ratification — Definition and Effect 8:15 Knowledge of Agent Imputable to Principal 8:16 Termination of Agent’s Authority 8:17 Termination of Agent’s Authority — Notice to Third Parties B. LIABILITY ARISING FROM AGENCY AND RESPONDEAT SUPERIOR 8:18 Principal and Agent or Employer and Employee — Both Parties Sued — Issue as to Relationship and Scope of Authority or Employment — Acts of Agent or Employee as Acts of Principal or Employer 8:19 Principal and Agent or Employer and Employee — Only Principal or Employer Sued — No Issue as to Relationship — Acts of Agent or Employee as Acts of Principal or Employer 8:20 Principal and Agent or Employer and Employee — Only Principal or Employer Sued — Issue as to Relationship and/or Scope of Authority or Employment — Acts of Agent or Employee as Acts of Principal or Employer 8:21 Principal and Agent or Employer and Employee — Both Parties Sued — Liability of Principal or Employer When No Issue as to Relationship or Scope of Authority or Employment 8:22 Principal and Agent or Employer and Employee — Both Parties Sued — Liability When Issue as to Relationship and/or Scope of Authority or Employment 8:23 Act of Corporate Officer or Employee as Act of Corporation 2 A. -
The Microeconomics of Insurance Full Text Available At
Full text available at: http://dx.doi.org/10.1561/0700000023 The Microeconomics of Insurance Full text available at: http://dx.doi.org/10.1561/0700000023 The Microeconomics of Insurance Ray Rees Institut f¨ur Volkswirtschaftslehre University of Munich Ludwigstrasse 28/III VG 80539 Munich Germany [email protected] Achim Wambach Department of Economics University of Cologne 50931 Cologne Germany [email protected] Boston – Delft Full text available at: http://dx.doi.org/10.1561/0700000023 Foundations and Trends R in Microeconomics Published, sold and distributed by: now Publishers Inc. PO Box 1024 Hanover, MA 02339 USA Tel. +1-781-985-4510 www.nowpublishers.com [email protected] Outside North America: now Publishers Inc. PO Box 179 2600 AD Delft The Netherlands Tel. +31-6-51115274 The preferred citation for this publication is R. Rees and A. Wambach, The Microe- conomics of Insurance, Foundations and Trends R in Microeconomics, vol 4, no 1–2, pp 1–163, 2008 ISBN: 978-1-60198-108-0 c 2008 R. Rees and A. Wambach All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, mechanical, photocopying, recording or otherwise, without prior written permission of the publishers. Photocopying. In the USA: This journal is registered at the Copyright Clearance Cen- ter, Inc., 222 Rosewood Drive, Danvers, MA 01923. Authorization to photocopy items for internal or personal use, or the internal or personal use of specific clients, is granted by now Publishers Inc for users registered with the Copyright Clearance Center (CCC). -
Case Comments
Washington and Lee Law Review Volume 14 | Issue 2 Article 4 Fall 9-1-1957 Case Comments Follow this and additional works at: https://scholarlycommons.law.wlu.edu/wlulr Recommended Citation Case Comments, 14 Wash. & Lee L. Rev. 220 (1957), https://scholarlycommons.law.wlu.edu/wlulr/ vol14/iss2/4 This Comment is brought to you for free and open access by the Washington and Lee Law Review at Washington & Lee University School of Law Scholarly Commons. It has been accepted for inclusion in Washington and Lee Law Review by an authorized editor of Washington & Lee University School of Law Scholarly Commons. For more information, please contact [email protected]. 220 WASHINGTON AND LEE LAW REVIEW [Vol. XIV CASE COMMENTS CONTRACT s-AcCEPTANCE OF OFFER BY FAILURE TO NOTIFY OFFEROR OF REJECTION. [Federal] It is a popular maxim that silence implies assent, or as Oliver Goldsmith once stated, "silence gives consent."u Since the development of the contract as a legal instrument, there have been repeated attempts to gain contractual advantages by asserting as a comparable legal rule that failure to express a rejection of an offer may constitute an accept- 3 ance of it.2 The recent case of Russell v. The Texas Company stands as one of the relatively infrequent instances in which this contention has been upheld in the courts. Plaintiff was the owner of certain prop- erty (referred to as section 23) in which defendant owned the mineral rights and had the right to use such of the surface as might be necessary for the mining of minerals. -
Why Is It So Difficult to Buy a High-Quality Used Car?
PAGE ONE economics ® Why Is It So Difficult To Buy a High-Quality Used Car? Scott A. Wolla, Ph.D., Senior economic education Specialist GLOSSARY “I discovered that the informational problems that exist in the used car market Adverse selection: The tendency of insurance were potentially present to some degree in all markets.” to be purchased by those most likely to —George A. Akerlof, Nobel Prize winner, 2001 make claims. Asymmetric information: A situation where one party to a market transaction has more information about a product or Are you in the market for a vehicle? During the 2007-09 recession, new- service than the other. The result may be vehicle sales plunged to their lowest levels in nearly 30 years. They have an over- or under-allocation of resources. since fully recovered as people replace their aging vehicles with shiny new Moral hazard: The risk that one party to a cars, trucks, vans, and sport utility vehicles. Prices of new vehicles, howev er, transaction will engage in behavior that is undesirable from the other party’s view. are at all-time highs, leading many buyers to look for used vehicles. It can Premium: The fee paid for insurance be a challenge, though, for buyers to figure out whether they are getting protection. a good deal. The seller generally knows far more about the vehicle. Even with careful examination, the buyer still likely won’t know everything the seller knows. When one party knows more about the product than the other party, there is “ asymmetric information .” In the case of a used car, the seller has more information—and the advantage. -
Network Markets and Consumer Coordination
NETWORK MARKETS AND CONSUMER COORDINATION ATTILA AMBRUS ROSSELLA ARGENZIANO CESIFO WORKING PAPER NO. 1317 CATEGORY 9: INDUSTRIAL ORGANISATION OCTOBER 2004 PRESENTED AT KIEL-MUNICH WORKSHOP ON THE ECONOMICS OF INFORMATION AND NETWORK INDUSTRIES, AUGUST 2004 An electronic version of the paper may be downloaded • from the SSRN website: www.SSRN.com • from the CESifo website: www.CESifo.de CESifo Working Paper No. 1317 NETWORK MARKETS AND CONSUMER COORDINATION Abstract This paper assumes that groups of consumers in network markets can coordinate their choices when it is in their best interest to do so, and when coordination does not require communication. It is shown that multiple asymmetric networks can coexist in equilibrium if consumers have heterogeneous reservation values. A monopolist provider might choose to operate multiple networks to price differentiate consumers on both sides of the market. Competing network providers might operate networks such that one of them targets high reservation value consumers on one side of the market, while the other targets high reservation value consumers on the other side. Firms can obtain positive profits in price competition. In these asymmetric equilibria product differentiation is endogenized by the network choices of consumers. Heterogeneity of consumers is necessary for the existence of this type of equilibrium. JEL Code: D43, D62, L10. Attila Ambrus Rossella Argenziano Department of Economics Department of Economics Harvard University Yale University Cambridge, MA 02138 New Haven, CT 06520-8268 -
Contemporaneous Perfect Epsilon-Equilibria
Games and Economic Behavior 53 (2005) 126–140 www.elsevier.com/locate/geb Contemporaneous perfect epsilon-equilibria George J. Mailath a, Andrew Postlewaite a,∗, Larry Samuelson b a University of Pennsylvania b University of Wisconsin Received 8 January 2003 Available online 18 July 2005 Abstract We examine contemporaneous perfect ε-equilibria, in which a player’s actions after every history, evaluated at the point of deviation from the equilibrium, must be within ε of a best response. This concept implies, but is stronger than, Radner’s ex ante perfect ε-equilibrium. A strategy profile is a contemporaneous perfect ε-equilibrium of a game if it is a subgame perfect equilibrium in a perturbed game with nearly the same payoffs, with the converse holding for pure equilibria. 2005 Elsevier Inc. All rights reserved. JEL classification: C70; C72; C73 Keywords: Epsilon equilibrium; Ex ante payoff; Multistage game; Subgame perfect equilibrium 1. Introduction Analyzing a game begins with the construction of a model specifying the strategies of the players and the resulting payoffs. For many games, one cannot be positive that the specified payoffs are precisely correct. For the model to be useful, one must hope that its equilibria are close to those of the real game whenever the payoff misspecification is small. To ensure that an equilibrium of the model is close to a Nash equilibrium of every possible game with nearly the same payoffs, the appropriate solution concept in the model * Corresponding author. E-mail addresses: [email protected] (G.J. Mailath), [email protected] (A. Postlewaite), [email protected] (L. -
The Folk Theorem in Repeated Games with Discounting Or with Incomplete Information
The Folk Theorem in Repeated Games with Discounting or with Incomplete Information Drew Fudenberg; Eric Maskin Econometrica, Vol. 54, No. 3. (May, 1986), pp. 533-554. Stable URL: http://links.jstor.org/sici?sici=0012-9682%28198605%2954%3A3%3C533%3ATFTIRG%3E2.0.CO%3B2-U Econometrica is currently published by The Econometric Society. Your use of the JSTOR archive indicates your acceptance of JSTOR's Terms and Conditions of Use, available at http://www.jstor.org/about/terms.html. JSTOR's Terms and Conditions of Use provides, in part, that unless you have obtained prior permission, you may not download an entire issue of a journal or multiple copies of articles, and you may use content in the JSTOR archive only for your personal, non-commercial use. Please contact the publisher regarding any further use of this work. Publisher contact information may be obtained at http://www.jstor.org/journals/econosoc.html. Each copy of any part of a JSTOR transmission must contain the same copyright notice that appears on the screen or printed page of such transmission. The JSTOR Archive is a trusted digital repository providing for long-term preservation and access to leading academic journals and scholarly literature from around the world. The Archive is supported by libraries, scholarly societies, publishers, and foundations. It is an initiative of JSTOR, a not-for-profit organization with a mission to help the scholarly community take advantage of advances in technology. For more information regarding JSTOR, please contact [email protected]. http://www.jstor.org Tue Jul 24 13:17:33 2007 Econornetrica, Vol. -
Beyond Principal-Agent Theories: Law and the Judicial Hierarchy
Copyright 2011 by Northwestern University School of Law Printed in U.S.A. Northwestern University Law Review Vol. 105, No. 2 BEYOND PRINCIPAL–AGENT THEORIES: LAW AND THE JUDICIAL HIERARCHY Pauline T. Kim INTRODUCTION ..................................................................................................................... 535 I. THE JUDICIAL HIERARCHY ............................................................................................ 538 II. PRINCIPAL–AGENT RELATIONSHIPS ............................................................................... 541 A. Common Law Agency .......................................................................................... 541 B. The Economic Model ........................................................................................... 544 C. The Political Model .............................................................................................. 548 III. PRINCIPAL–AGENT THEORY AND THE JUDICIAL HIERARCHY .......................................... 552 A. Assessing Theory Fit ............................................................................................ 553 B. Limitations of Principal–Agent Theories ............................................................. 561 IV. RECONCEPTUALIZING LAW AND THE JUDICIAL HIERARCHY ........................................... 571 CONCLUSION ......................................................................................................................... 575 INTRODUCTION It is now commonplace for judicial politics