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Hidden regret in insurance markets: Adverse and advantageous selection

Huang, Rachel J.; Muermann, Alexander; Tzeng, Larry Y. - Center for Financial Studies - 2008

We examine insurance markets with two types of customers: those who regret suboptimal decisions and those who don.t. In … positive correlation between the amount of insurance coverage and risk type, as in the standard economic models of adverse … selection, but there also exist separating equilibria that predict a negative correlation between the amount of insurance …

Persistent link: https://www.econbiz.de/10010986404

On the role of patience in an insurance market with asymmetric information

Sonnenholzner, Michael; Wambach, Achim - Center for Financial Studies - 2006

We analyse a 2-period competitive insurance market which is characterized by the simultaneous presence of standard … which patient consumers use high effort and buy a profit-making insurance contract with high coverage, whereas impatient …

Persistent link: https://www.econbiz.de/10010958723

Public policy and venture capital financed innovation: A contract design approach

Hirsch, Julia - Center for Financial Studies - 2006

The effects of public policy programs which aim at internalizing spill-overs due to successful innovation are analyzed in a sequential double-sided moral hazard doublesided adverse selection framework. The central focus lies in analyzing their impact on contract design. We show that in our...

Persistent link: https://www.econbiz.de/10010958733

A note on uniqueness in game-theoretic foundations of the reactive equilibrium

Mimra, Wanda; Wambach, Achim - Center for Financial Studies - 2014

Riley (1979)'s reactive equilibrium concept addresses problems of equilibrium existence in competitive markets with adverse selection. The game-theoretic interpretation of the reactive equilibrium concept in Engers and Fernandez (1987) yields the Rothschild-Stiglitz (1976)/Riley (1979)...

Persistent link: https://www.econbiz.de/10010961635

Public Policy and Venture Capital Financed Innovation: A Contract Design Approach

Hirsch, Julia - Center for Financial Studies - 2006

Persistent link: https://www.econbiz.de/10005120780

Screening and advising by a venture capitalist with a time constraint

Dietz, Martin D. - Center for Financial Studies - 2003

This paper proposes an intertemporal model of venture capital investment with screening and advising where the venture capitalists time endowment is the scarce input factor. Screening improves the selection of firms receiving finance, advising allows firms to develop a marketable product, both...

Persistent link: https://www.econbiz.de/10010986375

The future of securitization

Franke, Günter; Krahnen, Jan Pieter - Center for Financial Studies - 2008

Securitization is a financial innovation that experiences a boom-bust cycle, as many other innovations before. This paper analyzes possible reasons for the breakdown of primary and secondary securitization markets, and argues that misaligned incentives along the value chain are the primary cause...

Persistent link: https://www.econbiz.de/10010986376

Is the Behavior of German Venture Capitalists Different? Evidence from the Neuer Mark

Tykvová, Tereza - Center for Financial Studies - 2003

Using a unique, hand-collected database of all venture-backed firms listed on Germany´s Neuer Markt, we analyze the history of venture capital financing of these firms before the IPO and the behavior of venture capitalists at the IPO. We can detect significant differences in the behavior and...

Persistent link: https://www.econbiz.de/10010986397

Permanent and transitory policy shocks in an empirical macro model with asymmetric information

Kozicki, Sharon; Tinsley, P. A. - Center for Financial Studies - 2003

Despite a large literature documenting that the efficacy of monetary policy depends on how inflation expectations are anchored, many monetary policy models assume: (1) the inflation target of monetary policy is constant; and, (2) the inflation target is known by all economic agents. This paper...

Persistent link: https://www.econbiz.de/10010986417

The role of accounting in the German financial system

Leuz, Christian; Wüstemann, Jens - Center for Financial Studies - 2003

This chapter analyzes the role of financial accounting in the German financial system. It starts from the common perception that German accounting is rather uninformative. This characterization is appropriate from the perspective of an arms length or outside investor and when confined to the...

Persistent link: https://www.econbiz.de/10010986429