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Adverse Selection Models with Three States of Nature

Author

Listed:
  • Daniela MARINESCU

    (Bucharest Academy of Economic Studies)

  • Dumitru MARIN

    (Bucharest Academy of Economic Studies)

Abstract

In the paper we analyze an adverse selection model with three states of nature, where both the Principal and the Agent are risk neutral. When solving the model, we use the informational rents and the efforts as variables. We derive the optimal contract in the situation of asymmetric information. The paper ends with the characteristics of the optimal contract and the main conclusions of the model.

Suggested Citation

  • Daniela MARINESCU & Dumitru MARIN, 2011. "Adverse Selection Models with Three States of Nature," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania / Editura Economica, vol. 0(2(555)), pages 33-46, February.
    • Handle: RePEc:agr:journl:v:2(555):y:2011:i:2(555):p:33-46
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    Citations

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    Cited by:

    1. Constantin ANGHELACHE & Dumitru MARIN & Dana Luiza GRIGORESCU, 2020. "Mathematical model used in substantiating optimal contract," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania / Editura Economica, vol. 0(2(623), S), pages 5-18, Summer.
    2. Gyorgy Attila, 2012. "Agency Problems In Public Sector," Annals of Faculty of Economics, University of Oradea, Faculty of Economics, vol. 1(1), pages 708-712, July.
    3. Elena IONASCU & Marilena MIRONIUC & Ion ANGHEL, 2019. "Transparency of Real Estate Markets: Conceptual and Empirical Evidence," The Audit Financiar journal, Chamber of Financial Auditors of Romania, vol. 17(154), pages 306-306.

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