Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/101079
Authors: 
Erharter, Dominik
Year of Publication: 
2013
Series/Report no.: 
Working Papers in Economics and Statistics 2013-27
Abstract: 
We study optimal direct mechanisms for a credence goods expert who can be altruistic or spiteful. The expert has private information about her distributional preferences and possibly also about her customer's needs. We introduce a method that allows the customer to offer separate contracts to different preference types and outline when separation is optimal. Furthermore, we demonstrate that the optimality of separating mechanisms is sensitive to minor changes of the customer's utility function. Additionally, we illustrate how our results extend to more than two preference types and discuss possible policy implications.
Subjects: 
other-regarding preferences
inequality aversion
credence good
principal-agent model
adverse selection
moral hazard
JEL: 
D63
D64
L13
L15
C72
Document Type: 
Working Paper

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