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David Martimort is a French economist and Professor at the Toulouse School of Economics. Martimort is one of the most highly cited researchers in the field of contract theory. [1] His research has been awarded the Best Young French Economist Award in 2004. [2]
David Martimort was born in Langon, Gironde on 8 May 1967. He originally studied at the École Polytechnique (1986–89), but then obtained a master's degree from the University of Toulouse (1990), followed by a Ph.D. in 1992; his Ph.D. thesis, an analysis of mechanism design with multiple principals and asymmetric information, was written under Jean-Jacques Laffont. Later, in 1998, Martimort also earned his agrégation in economics. [3] During his studies, he worked as a researcher at the National Institute for Agronomic Research and the Institut d'économie industrielle, of which he later became research director. After his agrégation, he held professorships at the University of Pau and Pays de l'Adour (1998-2000) and the University of Toulouse (2000–07), before joining the Ecole des Hautes Etudes en Sciences Sociales (EHESS), first at the Toulouse School of Economics (2007–10) and since 2010 at the Paris School of Economics (PSE). Moreover, since 2012, Martimort has been the associated chair of the PSE. He has or has had editorial duties with the Journal of the European Economic Association , Review of Economic Studies , Econometrica , International Journal of Industrial Organization , Journal of Economic Theory , RAND Journal of Economics , Theoretical Economics , and the Revue d'Economie Politique. His research has been recognized, among else, with the Economic Prize of the French Banking Association (1995), a junior membership in the Institut Universitaire de France (2002–07), the Best Young French Economist Award (2004), and fellowships in the European Economic Association and Econometric Society. [4] [5]
David Martimort's research interests include contract theory and mechanism design, public-private partnerships, and ("green") public procurement. [6] In terms of research output, he ranks among the top 1% of economists registered on IDEAS/RePEc (January 2019). [7]
One key idea in Martimort's research is the possibility of a common agent who contracts with multiple principals that each control one agent's activity. Martimort shows that in such a setting, the revelation principle fails to hold and only a weaker version - the equivalence principle - holds, with the results critically depending on the complementarity or substitutability of activities across principals. [8] Martimort then applied multiprincipal incentive theory to supply chains, using it to explain why manufacturers' choice of common or exclusive retailers depends on the complementarity or substitutability of their brands, [9] and government, where it is used to describe the shared control of entities by regulatory bodies as a set of competing contracts. [10] Applying multi-principals and competing contracts to financial markets, Martimort, Bruno Biais and Jean-Charles Rochet develop a model that yields outcomes similar to those under imperfect competition, which however disappear as more competitors enter the market. [11] Finally, in two studies with Lars Stole, Martimort shows that all common agency equilibria can be characterized by an extension of the taxation principle - the "delegation principle" - [12] and how those equilibria are affected by direct externalities between principals under nonlinear price competition. [13]
Another fertile area of Martimort's research is collusion, which he extensively explored with Jean-Jacques Laffont. Among else, they show under which conditions a principal can offer agents who collude under asymmetric information implementable collusion-proof contracts and how these contracts depend on their (non-)anonymity. [14] They also show how the problem of collusion between agents in centralized organizations critically depends on the presence of limits to agents' communication, which creates a conflict between agents' participation and coalition incentive constraints, [15] that "the separation of powers in regulation may act as a commitment against the threat of regulatory capture", [16] and how principals can design collusion-proof mechanisms when agents' valuations are correlated. [17] Together with Antoine Faure-Grimaud, they also explore how the value of supervision with soft information depends on the tendency of supervisees and supervisors to collunder under asymmetric information, with centralized and decentralized settings resulting in the same outcome. [18] Finally, Martimort and Denis Gromb study how to design optimal incentive contracts for experts in different collusion environments, with important implications for the organization of delegated expertise. [19]
In his research on regulatory institutions, Martimort argues that they create a framework for the repeated interactions between an interest group and a regulatory agency, and may mitigate the risk of regulatory capture depending on their time preferences, information and transaction costs. [20] These general principles were then applied to the analysis of regulatory institutions in Latin America (with Antonio Estache). [21]
A more recent area in Martimort's research is the theory of public-private partnerships (PPPs). Together with Jerome Pouyet, Martimort analyzes whether the construction of public service infrastructure and the management of that infrastructure should be bundled or not, arguing that PPPs may be advantageous if there is a positive externality, the private benefits from asset ownership are not too large, and the risk of regulatory capture is limited. [22] In subsequent research with Elisabeth Iossa, Martimort further extends the analysis of benefits and costs of public-private partnerships by allowing for asymmetric information, moral hazard, and renegotiations as well as private or public financing. [23] [24]
In economics, a moral hazard is a situation where an economic actor has an incentive to increase its exposure to risk because it does not bear the full costs of that risk. For example, when a corporation is insured, it may take on higher risk knowing that its insurance will pay the associated costs. A moral hazard may occur where the actions of the risk-taking party change to the detriment of the cost-bearing party after a financial transaction has taken place.
From a legal point of view, a contract is an institutional arrangement for the way in which resources flow, which defines the various relationships between the parties to a transaction or limits the rights and obligations of the parties.
A complete contract is an important concept from contract theory.
In economics, insurance, and risk management, adverse selection is a market situation where buyers and sellers have different information. The result is the unequal distribution of benefits to both parties, with the party having the key information benefiting more.
In contract theory and economics, information asymmetry deals with the study of decisions in transactions where one party has more or better information than the other.
The principal–agent problem refers to the conflict in interests and priorities that arises when one person or entity takes actions on behalf of another person or entity. The problem worsens when there is a greater discrepancy of interests and information between the principal and agent, as well as when the principal lacks the means to punish the agent. The deviation from the principal's interest by the agent is called "agency costs".
Build–operate–transfer (BOT) or build–own–operate–transfer (BOOT) is a form of project delivery method, usually for large-scale infrastructure projects, wherein a private entity receives a concession from the public sector to finance, design, construct, own, and operate a facility stated in the concession contract. The private entity will have the right to operate it for a set period of time. This enables the project proponent to recover its investment and operating and maintenance expenses in the project.
Paul Robert Milgrom is an American economist. He is the Shirley and Leonard Ely Professor of Humanities and Sciences at the Stanford University School of Humanities and Sciences, a position he has held since 1987. He is a professor in the Stanford School of Engineering as well and a Senior Fellow at the Stanford Institute for Economic Research. Milgrom is an expert in game theory, specifically auction theory and pricing strategies. He is the winner of the 2020 Nobel Memorial Prize in Economic Sciences, together with Robert B. Wilson, "for improvements to auction theory and inventions of new auction formats".
Jean-Jacques Marcel Laffont was a French economist specializing in public economics and information economics. Educated at the University of Toulouse and the Ecole Nationale de la Statistique et de l'Administration Economique (ENSAE) in Paris, he was awarded PhD in economics by Harvard University in 1975.
Regulatory economics is the application of law by government or regulatory agencies for various economics-related purposes, including remedying market failure, protecting the environment and economic management.
Sanford "Sandy" Jay Grossman is an American economist and hedge fund manager specializing in quantitative finance. Grossman’s research has spanned the analysis of information in securities markets, corporate structure, property rights, and optimal dynamic risk management. He has published widely in leading economic and business journals, including American Economic Review, Journal of Econometrics, Econometrica, and Journal of Finance. His research in macroeconomics, finance, and risk management has earned numerous awards. Grossman is currently Chairman and CEO of QFS Asset Management, an affiliate of which he founded in 1988. QFS Asset Management shut down its sole remaining hedge fund in January 2014.
In monotone comparative statics, the single-crossing condition or single-crossing property refers to a condition where the relationship between two or more functions is such that they will only cross once. For example, a mean-preserving spread will result in an altered probability distribution whose cumulative distribution function will intersect with the original's only once.
Screening in economics refers to a strategy of combating adverse selection – one of the potential decision-making complications in cases of asymmetric information – by the agent(s) with less information.
Susan Carleton Athey is an American economist. She is the Economics of Technology Professor in the School of Humanities and Sciences at the Stanford Graduate School of Business. Prior to joining Stanford, she has been a professor at Harvard University and the Massachusetts Institute of Technology. She is the first female winner of the John Bates Clark Medal. She served as the consulting chief economist for Microsoft for six years and was a consulting researcher to Microsoft Research. She is currently on the boards of Expedia, Lending Club, Rover, Turo, Ripple, and non-profit Innovations for Poverty Action. She also serves as the senior fellow at Stanford Institute for Economic Policy Research. She is an associate director for the Stanford Institute for Human-Centered Artificial Intelligence and the director of Golub Capital Social Impact Lab.
Roger Bruce Myerson is an American economist and professor at the University of Chicago. He holds the title of the David L. Pearson Distinguished Service Professor of Global Conflict Studies at The Pearson Institute for the Study and Resolution of Global Conflicts in the Harris School of Public Policy, the Griffin Department of Economics, and the college. Previously, he held the title The Glen A. Lloyd Distinguished Service Professor of Economics. In 2007, he was the winner of the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel with Leonid Hurwicz and Eric Maskin for "having laid the foundations of mechanism design theory." He was elected a Member of the American Philosophical Society in 2019.
Benny Moldovanu is a German economist who currently holds the Chair of Economic Theory II at the University of Bonn. His research focuses on applied game theory, auction theory, mechanism design, contests and matching theory, and voting theory. In 2004, Moldovanu was awarded the Gossen Prize for his contributions to auction theory and mechanism design.
The multiple principal problem, also known as the common agency problem, the multiple accountabilities problem, or the problem of serving two masters, is an extension of the principal-agent problem that explains problems that can occur when one person or entity acts on behalf of multiple other persons or entities. Specifically, the multiple principal problem states that when one person or entity is able to make decisions and / or take actions on behalf of, or that impact, multiple other entities: the "principals", the existence of asymmetric information and self-interest and moral hazard among the parties can cause the agent's behavior to differ substantially from what is in the joint principals' interest, bringing large inefficiencies. The multiple principal problem has been used to explain inefficiency in many types of cooperation, particularly in the public sector, including in parliaments, ministries, agencies, inter-municipal cooperation, and public-private partnerships, although the multiple principal problem also occurs in firms with multiple shareholders.
Yeon-Koo Che is a Korean American economist. He is the Kelvin J. Lancaster Professor of Economic Theory at Columbia University, a position he held since 2009. Prior to joining Columbia in 2005, he was a professor at University of Wisconsin-Madison.
David E. M. Sappington is an American economist, academic advisor, and author. He is an Eminent Scholar in the Department of Economics, and the Director of Robert F. Lanzillotti Public Policy Research Center at the University of Florida. His research focuses on the study of regulatory policy issues in the communications and energy sectors.
James Malcomson is a British-Irish economist. He is emeritus Professor of Economics at the University of Oxford and emeritus Fellow of All Souls College. He is a specialist in the fields of labour economics and contract theory.
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