If people take due care, they will not be found negligent under the Rule of Simple Negligence. Moreover, under this rule, investment in due care is privately and socially optimal. These results jointly imply that liability insurance should not exist. But it does. One explanation relies on errors...

A clear understanding of what we know, don't know, and can't know should guide any reasonable approach to managing financial risk, yet the most widely used measure in finance today--Value at Risk, or VaR--reduces these risks to a single number, creating a false sense of security among risk...

With information asymmetry between contracting parties, adverse selection may result. A separation may be achieved if low-risk types can signal their identity—for example, by selecting from a menu of price-quantity contracts. In such models, signaling is costly and solutions are, at best,...

To date, most of the commentary on the impact of the Internet on retail marketing has been anecdotal, offering exaggerated speculative forecasts of its future potential. One view contends that the Internet will become a major new retail format, replacing the traditional dominance of fixed...

This is a talk, rather than a research or survey paper. Very little of what I say will be original, but I wish to stimulate discussion on a set of issues that arise from the nature of risk and that I consider problematic to our profession. The paper is not exhaustive of references and many of my...

This paper attempts to identify moral hazard in the traditional reinsurance market. We build a multi-period principle agent model of the reinsurance transaction from which we derive predictions on premium design, monitoring, loss control and insurer risk retention. We then use panel data on U.S....