Amsterdam Econometrics Seminars and Workshop Series

Speaker(s)
Christian Bontemps (University of Toulouse and Ecole Nationale de l’Aviation Civile, France)
Date
Friday, 24 January 2014
Location
Amsterdam

We develop a Principal-Agent model to represent management contracting for publicservice delivery. A firm (the Agent) has private knowledge of its marginal cost of production. The local public authority (the Principal) cares both on the consumers net surplus from consuming the services but also on the (weighted) firm’s profit. Contractual negotiation is modeled as the choice by the privately informed firm within a menu of options determining both the unit-price charged to consumers and fixed fee. Our theoretical model characterizes optimal contracting in this environment. We then explicitly study the nonparametric identification of the model and rule a semi-parametric estimation on a dataset coming from the 2001 wave of a survey from the French environment Institute (IFEN, Institut Francais de l’Environnement). Joint with  David Martimort.