Contributions

  • Harvard Business School - Contributor

Publication

2008 - Harvard Business School, Boston, Massachusetts

Language

English

Word Count

5,000 words, Guess

Page Count

20 pages

Identifiers

Description

I develop a screening model with delayed payments and probabilistic delayed observation of agents' types. I derive conditions in which a principal can set its payment delay to deter rogue agents and to attract solely or primarily good-type agents. Through the savings from excluding rogue agents, the principal can increase its profits while offering increased payments to good agents. I apply the model to online advertising markets widely perceived to be a hotbed for fraud. I estimate that a leading affiliate network could have invoked an optimal payment delay to eliminate 71% of fraud without decreasing profit.

Subjects

Series Statement

  • Working paper / Harvard Business School -- 08-072

Other Editions

  • Deterring online advertising fraud through optimal payment in arrearsHarvard Business School2008

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