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Financial Constraints and Moral Hazard: The Case of Franchising

Fan, Ying; Kühn, Kai-Uwe; Lafontaine, Francine - C.E.P.R. Discussion Papers - 2013

Financial constraints are an important impediment to the growth of small businesses. We study theoretically and empirically how the financial constraints of agents affect their decisions to exert effort, and, hence the organizational decisions and growth of principals, in the context of...

Persistent link: https://www.econbiz.de/10011084668

Tax Contracts and Government Formation

Gersbach, Hans; Schneider, Maik - C.E.P.R. Discussion Papers - 2008

proportional elections. A tax contract specifies a range of tax rates a party is committed to if in government. We develop a new …

Persistent link: https://www.econbiz.de/10005504289

Active Agents, Passive Principals: Does High-Powered CEO Compensation Really Improve Incentives

Dow, James; Raposo, Clara - C.E.P.R. Discussion Papers - 2002

allow the agent (CEO) to play a role in defining the parameters of the agency problem, in an incomplete contracting model in …

Persistent link: https://www.econbiz.de/10005504388

Contracting under Incomplete Information and Social Preferences: An Experimental Study

Hoppe, Eva I; Schmitz, Patrick W - C.E.P.R. Discussion Papers - 2013

Principal-agent models in which the agent has access to private information before a contract is signed are a … cornerstone of contract theory. We have conducted an experiment with 720 participants to explore whether the theoretical insights … the principals make contract offers, they anticipate that social preferences affect agents' behavior. …

Persistent link: https://www.econbiz.de/10011084433

Gathering Information before Signing a Contract: Experimental Evidence

Hoppe, Eva I; Schmitz, Patrick W - C.E.P.R. Discussion Papers - 2009

A central insight of agency theory is that when a principal offers a contract to a privately informed agent, the …

Persistent link: https://www.econbiz.de/10005789080

Insider Trading, Investment and Liquidity

Bhattacharya, Sudipto; Nicodano, Giovanna - C.E.P.R. Discussion Papers - 1999

We compare competitive equilibrium outcomes with and without trading by a privately informed 'monopolistic' insider, in a model with real investment portfolio choices ex ante, and noise trading generated by aggregate uncertainty regarding other agents' intertemporal consumption preferences. The...

Persistent link: https://www.econbiz.de/10005504224

Risk Taking and Optimal Contracts for Money Managers

Palomino, Frédéric; Prat, Andrea - C.E.P.R. Discussion Papers - 1999

conditions, there exists a first-best contract which takes the form of a bonus contract. In the latter, we show that there exists … no first-best contract and we use a numerical approximation to study the properties of the second-best contract … conditions, there exists a first-best contract which takes the form of a bonus contract. In the latter, we show that there exists …

Persistent link: https://www.econbiz.de/10005504241

Taxation and Venture Capital-Backed Entrepreneurship

Keuschnigg, Christian; Nielsen, Soren Bo - C.E.P.R. Discussion Papers - 2003

In recent years, venture capital has increasingly become a factor in the financing of new firms. We examine how the value of mature firms determines the incentives of entrepreneurs to start up new firms and of venture capitalists to finance and advise them. We examine how capital gains taxes as...

Persistent link: https://www.econbiz.de/10005504248

A Dynamic Analysis of the Demand for Health Insurance and Health Care

Bolhaar, Jonneke; Lindeboom, Maarten; van der Klaauw, Bas - C.E.P.R. Discussion Papers - 2008

We investigate the presence of moral hazard and advantageous or adverse selection in a market for supplementary health insurance. For this we specify and estimate dynamic models for health insurance decisions and health care utilization. Estimates of the health care utilization models indicate...

Persistent link: https://www.econbiz.de/10005504294

Individual Protection Against Property Crime: Decomposing the Effects of Protection Observability

Hotte, Louis; van Ypersele, Tanguy - C.E.P.R. Discussion Papers - 2005

We revisit the question of the efficiency of individual decisions to be protected against crime for the cases of both observable and unobservable protection. We obtain that observable protection is unambiguously associated with a negative externality and that at the individual level, it has a...

Persistent link: https://www.econbiz.de/10005504304