Adam Smith Business School

Professor John Moore, University of Edinburgh

“Red and Gold (Joint Work with Andrew Clausen and Chris Stapenhurst)”
Tuesday, 17 December 2024. 16:00-17:30
Room 141A, Adam Smith Business School

Abstract

Clausen and Stapenhurst (2024) obtain a lower bound on the cost of the optimal static, bribe-proof mechanism. But what about dynamic mechanisms? We propose a mechanism called “Red and Gold” that uses a nuisance action to deter bribes at arbitrarily small cost. The agent receives either a red or a gold ticket. If the monitor reports shirking then she is asked to guess the colour of the agent’s ticket. If the monitor’s guess is correct, then she receives an arbitrarily small reward, and the agent receives a large fine. Otherwise, the agent gets no fine. It follows that any equilibrium belief of the monitor leaves exactly one of the agent’s types better off rejecting bribes. But then the monitor can perfectly infer the agent’s type, so the type that rejects bribes would be better off accepting them. Hence there can be no bribes in equilibrium.

Bio

John Moore is an economic theorist with an interest in the nature of contracts, and the interplay between financial markets and the rest of the economy.

He was appointed to the George Watson's and Daniel Stewart's Chair of Political Economy at the University of Edinburgh in 2000. Previously, in 1983, he was appointed to the London School of Economics, where in 1990 he became Professor of Economic Theory, a position he still holds. In 2018, Moore was appointed David Hume University Chair of Economics.

He was the 2010 President of the Econometric Society. He is a Fellow of the British Academy, the Econometric Society, the European Economic Association and the Royal Society of Edinburgh. He is a Foreign Honorary Member of the American Academy of Arts and Sciences and the American Economic Association.

In 1999, he and his collaborator Nobuhiro Kiyotaki jointly received the Yrjö Jahnsson Award from the European Economic Association.

In 2010, Kiyotaki and Moore won the Stephen A. Ross Prize in Financial Economics for their paper "Credit Cycles".

John Moore's curriculum vitae and links to a selection of his papers and lectures are available at: http://homepages.econ.ed.ac.uk/~jhmoore/

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First published: 21 November 2024