Agency Costs.ppt

Agency Costs Sciences Po F.H. Buckley Goetz 65-75 Remaining classesAll save the first in 56, St-Peres, room 401 Monday, Nov. 13 1015-1215, 27 St-Guillaume, room 11 (first floor) Tues., Nov. 14 1445 – 1645 Thurs., Nov. 16 1230 - 1430 Tues., Nov. 21 1445 - 1645 Readings after the break Monday, Nov. 13: Buckley 136-56 Tuesday, Nov. 14: Goetz 189-211 Thursday, Nov. 16: Buckley 63-101 Tuesday, Nov. 21: Buckley 101-35 Three New AssignmentsDue Monday, Nov. 13 at 1015 Answer Question 1(c) on page 76. Work out the problem assuming Goetz’s figure of $135.72. Illustrate, with the aid of an Edgeworth Box Diagram, the concepts of Pareto-superiority and Pareto-optimality. Answer Question 1 on page 174 Assignment for last day First Assignment: answer questions posed in the last paragraph of Goetz p. 19: assume that the choice is only between 0 doses and two doses (taken from presentation from last week). Assignment for last day First Assignment: answer questions posed in the last paragraph of Goetz p. 19: assume that the choice is only between 0 doses and two doses (taken from presentation from last week). There was a trick… What kind of a game is Road Repair? Road Repair as a Chicken GameAssume that the choice is between 0 and 3 dosesEach dose costs $25 Now assume that each dose costs $55Going from 0 to 2 doses Is this a PD game? Recall the definition on p. 10 Now assume that each dose costs $55b a and d c so that Defect is the dominant strategy Now assume that each dose costs $55a c and b d : one is always better off if the other party cooperates Now assume that each dose costs $55a + a beats every other combination Now assume that each dose costs $55 Benefits = $120 each, 2 doses = $110 Now assume that each dose costs $55 Which comes to… Now assume that each dose costs $55The defect strategy dominates Now assume that each dose costs $55One is always better if the other party cooperates Now assume that each dose costs $55But does a+a beat