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Hidden Insurance in a Moral Hazard Economy

Bertola, Giuseppe - 2013

We consider an economy where individuals privately choose effort and trade competitively priced securities that pay off with effort-determined probability. We show that if insurance against a negative shock is sufficiently incomplete, then standard functional form restrictions ensure that...

Persistent link: https://www.econbiz.de/10013071425

Competition and the Ratchet Effect

Charness, Gary; Kuhn, Peter Joseph; Villeval, Marie-Claire - 2021

The 'ratchet effect' refers to a situation where a principal uses private information that is revealed by an agent's early actions to the agent's later disadvantage, in a context where binding multi-period contracts are not enforceable. In a simple, context-rich environment, we experimentally...

Persistent link: https://www.econbiz.de/10013324885

Free-Riding and Knowledge Spillovers in Teams : The Role of Social Ties

De Paola, Maria - 2016

We investigate whether and how social ties affect performance in teams by implementing a field experiment in which a sample of undergraduate students are randomly assigned to either teams composed by friends or teams composed by individuals not linked by friendship relationships. Students...

Persistent link: https://www.econbiz.de/10012981511

Aligning Ambition and Incentives

Koch, Alexander K.; Peyrache, Eloic - 2021

Labor turnover creates longer term career concerns incentives that motivate employees in addition to the short term … monetary incentives provided by the current employer. We analyze how these incentives interact and derive implications for the … incentives' and 'good reputational incentives'. We show that the principal optimally designs contracts to create ambiguity about …

Persistent link: https://www.econbiz.de/10013318646

Second-Degree Moral Hazard in a Real-World Credence Goods Market

Balafoutas, Loukas - 2014

Empirical literature on moral hazard focuses exclusively on the direct impact of asymmetric information on market outcomes, thus ignoring possible repercussions. We present a field experiment in which we consider a phenomenon that we call second-degree moral hazard – the tendency of the supply...

Persistent link: https://www.econbiz.de/10013061956

Reputation and Credit Market Formation : How Relational Incentives and Legal Contract Enforcement Interact

Fehr, Ernst - 2009

relational incentives are a powerful causal determinant for the existence and performance of credit markets. In fact, in the … incentives and exacerbates another moral hazard problem in credit markets ﾖ the choice of inefficient high-risk projects …

Persistent link: https://www.econbiz.de/10013157034

The Dilemma of Delegating Search : Budgeting in Public Employment Services

Addison, John T. - 2010

high-powered incentives for high levels of search effort on the part of job centers, we propose output-related schemes that …

Persistent link: https://www.econbiz.de/10013138264

Optimal Incentive Contracts Under Moral Hazard When the Agent is Free to Leave

Englmaier, Florian - 2010

We characterize optimal incentive contracts in a moral hazard framework extended in two directions. First, after effort provision, the agent is free to leave and pursue some ex-post outside option. Second, the value of this outside option is increasing in effort, and hence endogenous. Optimal...

Persistent link: https://www.econbiz.de/10013141421

Image Versus Information : Changing Societal Norms and Optimal Privacy

Ali, S. Nageeb - 2016

"descriptive norm") what they really value (the "prescriptive norm"), thus presenting her with a tradeoff between incentives and …

Persistent link: https://www.econbiz.de/10012990864

Agency and Communication in IMF Conditional Lending : Theory and Empirical Evidence

Marchesi, Silvia - 2014

the countries' authorities, openness, and transparency, consistently with the theory …

Persistent link: https://www.econbiz.de/10012750944