Laurent Lamy (CIRED) - Distinguishing Incentive from Selection Effects in Auction-Determined Contracts

This paper develops a novel approach to estimate the incentive effects of contracts when the matching between agents and principals, and the contract features, derive from an auction process. The post-auction outcome of each agent depends on the principal-agent observable characteristics, the contract features and also on unobserved signals which drive how principals bid for the agents. We propose a two-step procedure which consists of, first, estimating the primitives of an interdependent values Read more [...]