Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/240624 
Year of Publication: 
2021
Series/Report no.: 
IAAEU Discussion Paper Series in Economics No. 03/2021
Publisher: 
University of Trier, Institute for Labour Law and Industrial Relations in the European Union (IAAEU), Trier
Abstract: 
We relax the common assumption of homogeneous beliefs in principal-agent relationships with adverse selection. Principals are competitors in the product market and write contracts also on the base of an expected aggregate. The model is a version of a cobweb model. In an evolutionary learning set-up, which is imitative, principals can have different beliefs about the distribution of agents' types in the population. The resulting nonlinear dynamic system is studied. Convergence to a uniform belief depends on the relative size of the bias in beliefs.
Subjects: 
Evolutionary game theory
imitation equilibrium
heterogeneous beliefs
adverse selection
cobweb model
JEL: 
C61
C73
D82
D83
E32
Document Type: 
Working Paper

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