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Moral Hazard in Electoral Teams
Cox, Gary W. - 2020
How do parties motivate candidates to exert effort in closed-list elections? If each candidate's primary goal is winning a seat, then those in safe and hopeless list positions have weak incentives to campaign. We present a model in which (i) candidates care about both legislative seats and the...
Persistent link: https://www.econbiz.de/10012830995
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Wage Risk and the Skill Premium
Slavík, Ctirad - 2020
, individual wage risk has also increased. This paper proposes a mechanism through which a rise in wage risk increases the skill … premium. Intuitively, a rise in uninsured wage risk increases precautionary savings, thereby boosting capital accumulation … that the rise in wage risk observed between 1967 and 2010 increases the skill premium significantly. This finding is robust …
Persistent link: https://www.econbiz.de/10012824576
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The Pygmalion effect : an agency model with reference dependent preferences
Daido, Kohei; Itoh, Hideshi - 2005
We attempt to formulate and explain two types of self-fulfilling prophecy, called the Pygmalion effect (if a supervisor thinks her subordinates will succeed, they are more likely to succeed) and the Galatea effect (if a person thinks he will succeed, he is more likely to succeed). To this...
Persistent link: https://www.econbiz.de/10010261169
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Moral Hazard in Drug Purchases
Harju, Jarkko; Verho, J - 2023
We study the moral hazard effects of the drug copayment threshold in Finland using detailed prescription drug purchase data. The analysis reveals that the average drug costs increase discontinuously by 17% at the threshold above which out-of-pocket drug costs decrease substantially. Our results...
Persistent link: https://www.econbiz.de/10014347995
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Natural Disasters, Moral Hazard, and Special Interests in Congress
Kaplan, Carol - 2019
We exploit the precise timing of natural disasters to provide empirical evidence on the connection between electoral accountability and politicians’ support for special interests. We show that, in the immediate aftermath of a disaster, the evening news substantially reduce their coverage of...
Persistent link: https://www.econbiz.de/10012892175
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Advantageous Selection Without Moral Hazard (with an Application to Life Care Annuities)
De Donder, Philippe; Leroux, M.‐L; Salanié, François - 2022
motivate its advent by differences in risk-aversion among agents, implying different prevention efforts. We argue that it may … also appear in the absence of moral hazard, when agents only differ in riskiness and not in (risk) preferences. We first … selection may occur when several contracts are offered, when agents also face a non-insurable background risk, or when agents …
Persistent link: https://www.econbiz.de/10014083046
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When Pro-Poor Microcredit Institutions Favor Richer Borrowers - A Moral Hazard Story
Biancini, Sara; Venet, Baptiste; Ettinger, David - 2021
We suggest an explanation for the existence of “mission drift”, the tendency for Microfinance Institutions (MFIs) to lend money to wealthier borrowers rather than to the very poor. We focus on the relationship between MFIs and external funding institutions. We assume that both the MFIs and...
Persistent link: https://www.econbiz.de/10013245624
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Deposit Insurance, Moral Hazard and Bank Risk
Karas, Alexei; Pyle, William; Schoors, Koen J. L. - 2021
Using evidence from Russia, we explore the effect of the introduction of deposit insurance on bank risk. Drawing on … that larger declines in market discipline generate larger increases in traditional measures of risk. These results hold in …
Persistent link: https://www.econbiz.de/10013249648
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Competitive Procurement with Ex Post Moral Hazard
Chakraborty, Indranil; Khalil, Fahad; Lawarree, Jacques - 2021
Unlike standard auctions, we show that competitive procurement may optimally limit competition or use inefficient allocation rules that award the project to a less efficient firm with positive probability. Procurement projects often involve ex post moral hazard after the competitive process is...
Persistent link: https://www.econbiz.de/10013249652
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Immigration and Worker-Firm Matching
Orefice, Gianluca - 2020
The process of matching between firms and workers is an important mechanism in determining the distribution of wages …
Persistent link: https://www.econbiz.de/10012838239