ECON 3123: PROBLEM SET 2
PROFESSOR RICHARD HOLDEN
This is due at the start of lecture in Week 6. Late problem sets receive zero credit.
(1) Find all Pure Strategy Nash Equilibria of the following game. Explain why
they are Nash Equilibria. (HINT: Use the
ECON3123: Economics of Corporations
Semester 2, 2012
Ashley Cheng
Midterm Examination
Solutions
15 September 2012
Question 1: Problem
(1) Write down the Agents Optimization Problem
This ought to be pretty simple. The Agent is going to maximise, with respe
ECON3123: Economics of Corporations
Semester 2, 2012
Ashley Cheng
Solutions to Problem Set 2
21 August 2012
Question 1
We start by examining the denition of a Nash Equilibrium. As strategy prole = i , i is a
Nash Equilibrium if:
Ui i , i Ui
i , i
i Si and
ECON3123: Economics of Corporations
Semester 2, 2012
Ashley Cheng
Solutions to Problem Set 4
Based on Solutions to Problem Set 4 by Dr. J. Lim
08 October 2012
In preparing these solutions, I am indebted to Dr. Jonathan Lim who provided me with a comprehen
ECON 3123: PROBLEM SET 1
PROFESSOR RICHARD HOLDEN
This is due at the start of lecture in Week 4. Late problem sets receive zero credit.
(1) Consider a setting with a risk-averse worker and a risk-neutral rm. The
worker puts in some eort level a which the
ECON3123: Economics of Corporations
Semester 2, 2012
Ashley Cheng
Midterm Examination
Feedback
07 October 2012
General Feedback
This exam was not an particularly easy exam. Nor, however, was it a particularly dicult exam. The
exam was algebraically tediou
ECON 3123: PROBLEM SET 4
PROFESSOR RICHARD HOLDEN
This is due at the start of lecture in week 11. Late problem sets receive zero credit.
We ackowledge this Problem Set as based on the work of Dr. Jonathan Lim.
(1) Suppose that Denso is making air-conditio
ECON 3123: Economics of Corporations
Semester 2, 2012
Solutions to Problem Set 1
Ashley Cheng
Question 1
Part (a):
This is a simple application of your rules concerning variances and expected values.
()
(
)
()
()
(
)
()
()
(
)
()
(
()
)
Part (b):
All you
Organisational Economics (ECON 3123)
Game Theory Exercise
Adam Solomon
August 7, 2016
Question 1
Find all Nash equilibria of the following game.
Stag Hunt
Stag (3,3) (0,1)
Hunt (1,0) (1,1)
Question 2
Find all Nash equilibria of the following game.
L
R
U (
Organisational Economics
Introduction to Incentives
Hongyi Li
July 2016
1
Introduction: The Principal-Agent Framework
In this lecture, we will take a first look at what is called the Principal-Agent Problem. Basically, we will discuss how to motivate one
Organisational Economics
Introduction to Incentives
Hongyi Li
August 2016
1
Noisy Incentives and Risk-Aversion
So far, weve been writing down models where there is a precise link between effort and
output specifically, effort exactly equals output. Thus
Organisational Economics
ECON 3123, Lecture 3
August 2016
1
Simultaneous-Move Games
How to define a game:
a set of players
for each player, a description of the possible actions (strategies) for that player
a description of the consequences of players
ECON3123 Midterm Exercises
Adam Solomon
Question 1
In this question, well work through the standard model with noisy output, with the following twist: the
principal is risk-averse, while the agent is risk-loving.
The principals payoff function is Up = E[x
1
Non-Congruent Performance Measures
As we noted at the beginning of this chapter, it is hard to think of m(any) situation(s) where
everything that the principal cares about is contractiblein the sense that it will be enforced by
a court. So one motivatio
Solutions to ECON3123 Midterm Exercises
Adam Solomon
Question 1
a) For step 3, given the principals offer (w = + x), write down the agents maximization problem, and
calculate his payoff-maximizing effort choice e as a function of and .
Noting that
E(w) =
Organizational Economics
Multi-Tasking and Performance Measures
August 2016
1
The Basic Multi-Tasking Model
So far we have focused on situations where the agent performs a single task for the principal. In
reality, of course, there are many situations of
Economics of Corporations (ECON 3123)
Problem Set 2
This is due on Tuesday August 23 by 12pm.
Question 1
Find all pure-strategy equilibria of the following simultaneous-move game.
Player 2
Left Right
Up (1,1)
(0,0)
Player 1
Down (-4,-4) (2,3)
Question 2
D
ECON 3123: PROBLEM SET 3
PROFESSOR RICHARD HOLDEN
This is due at the start of lecture in week 9. Late problem sets receive zero credit.
1. Career Concerns
Consider the following repeated relationship between a Manager (M) and the
market. There are two tim
FinancialContracting
Problem:Somehaveprojectsbutnomoney,somehavemoneybutnoprojects
Question:howdothesepartiescontractwithoneanother?Manypossibilities
o Votingequity
o Nonvotingequity
o Debt
o Other
AghionandBolton(1992ReStud)
MainPoints
Controlrightsarean
ECON3123: Economics of Corporations
Semester 2, 2012
Ashley Cheng
Hints for Problem Set 3
13 September 2012
Question 1(a):
Remember what First Best is (if in doubt, see my Feedback form from Problem Set 1). Remember that
you need to add accross both perio
ECON 3123: ECONOMICS OF CORPORATIONS
Course Reading Guide
A Guide to the Guide:
The prescribed text for the course is:
Contract Theory, Patrick Bolton & Mathias Dewatripont, MIT Press
Some Economics of the Corporations, Richard Holden, Manuscript in progr
ECON3123: Economics of Corporations
Semester 2, 2012
Ashley Cheng
Solutions to Problem Set 5
Based on Solutions to Problem Set 5 by Dr. J. Lim
22 October 2012
Again, in preparing these solutions, I am indebted to Dr. Jonathan Lim who provided me with a
co
ECON3123: Economics of Corporations
Semester 2, 2012
Ashley Cheng
Solutions to Problem Set 3
22 October 2012
In writing these solutions, I am indebted to the guidance provided by Prof. Richard Holdens solutions.
Part (a) Solve for the First Best. What det
ECON 3123: PROBLEM SET 5
PROFESSOR RICHARD HOLDEN
This is due at the start of lecture in week 13. Late problem sets receive zero credit.
We ackowledge this Problem Set as based on the work of Dr. Jonathan Lim.
(1) Up to this point we have presumed partici
Organisational Economics (ECON 3123)
Problem Set 1
This is due on August 9 by 12pm.
Question 1
In this problem, we will consider a multitasking problem where the principal can only incentivize
the agent on one task.
There are two tasks (task 1 and task 2)