Michel Poitevin's research while affiliated with Université de Montréal and other places
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Publications (34)
This paper compares the e!cacy of a centralized and a decentralized rights struc- ture in determining the size of an externality generating project. Consider a central authority and two localities. One locality can operate a variable-size project which produces an externality that a"ects the other locality. Each locality may have some private infor...
We examine the problem of providing a non-rival and excludable public good to individuals with the same preferences and differing contributing capacities. Exclusion from the public good is costly in the sense that if two different quantities of the public good are consumed in the community, then the sum of the costs of providing the two quantities...
A production process involves a principal and two privately informed agents. Production requires coordinated decision making. It might be carried in a centralized organization or through delegated contracting in a hierarchical structure. We compare the performance of different organizational structures when renegotiation of initial contracts is pos...
This paper discusses the problem of optimal design of a jurisdiction structure from the view point of a welfarist social planner when households with identical utility functions for non-rival public good and private consumption have private information about their contributive capacities. It shows that the superiority of a centralized provision of...
We investigate the conditions under which an inequality averse and additively separable welfarist central government would choose to set up a progressive equalization payments scheme in a federation with local public goods. A progressive equalization payments scheme is a list of per capita net (possibly negative) subsidies – one such net subsidy fo...
We characterize the solution to a dynamic model of risk sharing under non-commitment when saving is possible. Savings can play two important roles. First savings can be used to smooth aggregate consumption across different periods. Second, when savings are observable, they can act as a collateral that can be seized in the case of default. This rela...
We construct a model of valuation to assess the financial fragility of a set of firms in a closed economy. A firm is identified with a possibly infinite random sequence of benefits. Firms with negative benefits in a given period are said to be in distress and need liquidity to refinance their projects. Those liquidities must be obtained from firms...
We propose a valuation model for a bank which faces a bankruptcy risk. Banks are identified with a possibly infinite random sequence of net benefits. A bank is solvent as long as its benefits remain non-negative. To preserve distressed banks from destruction, banks will be pooled within a financial coalition. When possible, those with current posit...
This paper addresses the question of whether R&D should be carried out by an independent research unit or be produced in-house by the firm marketing the innovation. We define two organizational structures. In an integrated structure, the firm that markets the innovation also carries out and finances research leading to the innovation. In an indepen...
This paper addresses the question of whether R&D should be carried out by an independent research unit to be produced in-house by the firm marketing the innovation.
This paper addresses the question of whether R&D should be carried out by an independent research unit or be produced in-house by the firm marketing the innovation. We define two contractual structures. In an independent structure, the firm that markets the innovation buys it from an independent research unit which is financed externally. In an int...
This survey presents within a single model three theories of decentralization of decision-making within organizations based on private information and incentives.
(Sous la direction de Michel Poitevin)
Impartition et sous-traitance apparaissent souvent comme des
synonymes : pourtant, les deux termes recoupent des réalités distinctes. La sous-traitance renvoie aux modalités - économiques ou légales - de toute forme de délégation. L'impartition désigne une stratégie d'entreprise et se distingue de la sous-t...
This paper studies the impact of banks' liability for environmental damages caused by their borrowers. Laws or court decisions that declare banks liable for environmental damages have two objectives: (1) finding someone to pay for the damages and (2) exerting a pressure on a firm's stakeholders to incite it to invest in environmental risk preventio...
This paper surveys the major issues regarding the transferability of tax losses upon a change of control. Whether tax losses should be transferable or not depends on whether the market for corporate control is efficient or not. If there are too few efficiency-enhancing takeovers, then takeovers should be - subsidized - . If, on the contrary, there...
This paper studies the impact of banks' liability for environmental damages caused by their borrowers. Laws or court decisions that declare banks liable for environmental damages have two objectives : (1) finding someone to pay for the damages and (2) exerting a pressure on a firm's stakeholders to incite them to invest in environmental risk preven...
We analyze a long-term risk-sharing contract between two risk-averse agents facing self-enforcing constraints. We enlarge the contracting space to allow for an ex ante transfer before the state of nature is realized and we characterize the optimal ex ante and ex post payments. We show that optimal ex ante payments are inversely related to the non-s...
This paper studies the effect of combining different insurance schemes on the efficiency of consumption smoothing in an environment without commitment. A savings account is introduced into the self-enforcing risk-sharing model of Thomas and Worrall (1988). The risk averse agent's savings play the role of a collateral, thereby improving consumption...
In this paper we analyze a long-term risk-sharing contract between two risk-averse agents facing self-enforcing constraints. We enlarge the contracting space to allow for an ex ante transfer (at the beginning of the period) before the state of nature is realized. We analyze the trade-off between the self-enforcing constraints of the two agents by c...
This paper examines how the possibility of recontracting affects the financing of projects when an entrepreneur is privately informed about the distribution of returns. An entrepreneur solicits initial financing for a project from competing uninformed financiers. Once the project is undertaken, but before its returns are realized, the entrepreneur...
This paper provides a unifying framework for studying renegotiation of contracts in the presence of asymmetric information. We show that interim renegotiation does not constrain the set of contracts attainable with full commitment, regardless of whether renegotiation offers are made by the informed or the uninformed agent. Ex post renegotiation, ho...
RÉSUMÉ
Le présent article étudie l’influence de la structure des marchés financiers sur les décisions d’investissement des entreprises à partir de données longitudinales d’entreprises de six pays : l’Allemagne et le Japon d’une part, où s’établissent plutôt des relations de long terme entre prêteurs et emprunteurs, le Canada, les États-Unis, la Fra...
We examine why different renegotiation processes can lead to opposite results regarding the commitment value of third-party contracts in the presence of asymmetric information. Our main result is that a contract loses all strategic value if renegotiation is allowed during the production stage rather than only before production begins. This result c...
This paper examines how the possibility of renegotiation affects contractual outcomes in signaling games when an infinite number of rounds of renegotiations are allowed before contracts are executed. The main results of the paper are (1) contracts may still contain distortions, (2) the popular 'efficient' separating-equilibrium outcome is never an...
RÉSUMÉ
Cet article présente une caractérisation des contrats financiers d’équilibre dans un modèle à deux périodes avec sélection adverse. Nous analysons le cas où l’information privée de l’entrepreneur sur la rentabilité de son projet est parfaitement corrélée sur les deux périodes. Dans ce contexte dynamique, nous démontrons que les contrats d’éq...
RÉSUMÉ
Cet article étudie les liens potentiels qui peuvent exister entre la disponibilité du collatéral pour les firmes et leurs décisions d’investissement. Nous identifions d’abord sous quelles conditions le collatéral apparaît de façon optimale dans les contrats financiers. Puis, sous ces conditions, nous considérons comment le collatéral, lorsqu...
This paper presents a model of the agency costs of debt finance, based on the conflict of interest between shareholders and bondholders. We show how the terms of the compensation contract offered to management by shareholders can reduce these agency costs. We derive a managerial compensation contract that restores the first-best outcome and leads t...
In an entry game, the entrant and financial markets are uninformed about the incumbent's costs. The entrant wishes to enter the market if and only if the incumbent has high costs. Therefore, a low cost incumbent would like to signal its cost to the entrant to deter its entry. Simultaneously, it would like to reveal its private information to financ...
The author shows that, in credit relationships, the choice of a lender may become a determinant of the extent of competition in downstream industries. In the presence of imperfect output markets and asymmetric information in financial markets, members of an industry may achieve a partial collusion in the output market by borrowing from the same ban...
RÉSUMÉ
Cette revue de littérature étudie les problèmes d’information dans les marchés financiers. La première section établit un modèle de base qui étudie les effets des asymétries d’information sur le comportement des agents économiques et sur la nature de l’équilibre des marchés financiers. Dans la deuxième section, divers mécanismes incitatifs p...
We characterize a firm as a nexus of activities and projects with their associated cashflow distributions across states of the world and time. With specialized managers intent on max-imizing firm value, we show that such a representation leads to a transformation possibility frontier between the riskiness and expected value of cashflows. A firm rea...
Citations
... There are some cooperative mechanisms in social dilemmas [14] to resist the invasion of traitors, such as punishment [15][16][17], exclusion [18][19][20] and expulsion [21][22][23]. Punishment is an effective mechanism for promoting cooperation [15]; it pays a certain cost to fine the defector, reducing the income of the defector, to promote cooperation. ...
![[object Object]](https://i1.rgstatic.net/ii/profile.image/868142637133827-1583992742418_Q64/Nicolas-Gravel-2.jpg)
... Organisational attributes such as strategy dictate the required governance model. A single business strategy demands high levels of centralisation and leads to minimal communication cost (Ambec & Poitevin, 2016;Galbraith, 2008). Diversification into related products requires moderate centralisation. ...
![[object Object]](https://i1.rgstatic.net/ii/profile.image/272510595891224-1441982997865_Q64/Stefan-Ambec.jpg)
... While institutional intermediaries have given mass society a stake in the financial markets, these funds do not represent all stakeholders in society, especially the poor or unemployed, and they do not represent future generations. 70 In sum, it is not persuasive to proclaim that simply because an investor with an economy-wide portfolio is potentially exposed to an array of externalities, that investor will or should thereby 'internalize' those costs in its financial decisions. ...
![[object Object]](https://i1.rgstatic.net/ii/profile.image/278805601112080-1443483843997_Q64/Michel-Patry.jpg)
... Recently, Koethenbuerger (2008) has investigates the role of externality, not the role of information asymmetry, on the welfare differential between centralization and decentralization. Klibanoff and Poitevin (2012), whose work is most closely related to this paper, investigate the relative efficiency between centralization and decentralization under asymmetric information. The main difference is that Klibanoff and Poitevin (2012) adopt Coasian bargaining as a decentralized decision procedure for the production of local public goods, while we use a non-cooperative approach in determining the production of local public goods under decentralization. 1 Notice that a bargaining procedure implicitly assumes that a commitment is possible, which is not allowed in the non-cooperative approach. ...
... Jensen and Meckling (1976) proposed the convergence of interest hypothesis, in which managers who were given stock ownership have a better effect on firm performance. Brander and Poitevin (1992) explained that the terms offered in the compensation contract reduced the agency cost. In China, the same results were established by Zhang et al. (2016), who concluded that the perks of senior executives were negatively related to the agency cost. ...
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... Working with promised values permits us to formulate the contract design problem recursively. Mutual insurance has been studied by Kletzer and Wright (1996), Kocherlakota (1996), Ligon, Thomas, and Worrall (2002), and Gauthier, Poitevin, and Gonzalez (1997) amongst others. Some of the potential empirical implications of these models have been drawn by Hayashi (1996), Foster and Rosenzweig (1995), Platteau (1996), Ligon, Thomas, and Worrall (2002) and Kocherlakota (1996). ...
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... This specification is of some importance because, as shown in Gravel and Poitevin (2006), it is the only additive and symmetric between the two goods utility function which, when aggregated by a mean of order r MD, leads this MD to always choose to redistribute money from the rich to the poor jurisdiction in a structure with exclusion where the incentive constraints are satisfied. Another advantage of this specification is that the choice between the two structures mostly depends upon only two parameters: the demographic ratio a = n 1 /n 2 of the number of rich over the number of poor, and the interquartile ratio b = w 1 /w 2 of the high income over the small one (Gravel and Poitevin, 2006). ...
... L'équilibre Bayésien parfait de ce jeu est un triplet de stratégies ( de Gertner, Gibbons et Scharfstein (1988), la signalisation est coûteuse dans le modèle de Poitevin (1990). Les coûts de signalisation prennent la forme d'un transfert de bénéfices des actionnaires vers les bailleurs de fonds. ...
... A non-exhaustive list includesThomas and Worrall (1988),Kocherlakota (1996),Attanasio and Ríos-Rull (2000),Kehoe and Levine (2001),Ligon et al. (2002),Krueger and Perri (2006),Krueger and Perri (2011),Tian and Zhang (2013) andLaczó (2014). See alsoGobert and Poitevin (2006) who allow for savings in a model of dynamic risk sharing with limited commitment. ...
... Autoriai [11] nagrinëja, kodël perspektyvus procesas gali sukelti prieðingus rezultatus pasiþadëjus ávertinti sutarties treèiojoje dalyje pristatytà konfidencialià informacijà. Pagrindinis rezultatas toks, kad sutartis praranda visà strateginae vertae, jeigu perspektyva numatyta prieð pradedant produkcijos gamybos etapà. ...
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