The paper provides a tractable, analytical framework to study regulatory risk under optimal incentive regulation …. Regulatory risk is captured by uncertainty about the policy variables in the regulator's objective function: weights attached to … profits and costs of public funds. Results are as follows: 1) The regulator's reaction to regulatory risk depends on the …

The paper provides a tractable, analytical framework to study regulatory risk. Regulatory risk is captured by … funds. Results are as follows: 1) The regulator's reaction to regulatory risk depends on the curvature of aggregate demand …. 2) It yields a positive information rent effect exactly when demand is convex. 3) Firms benefit from regulatory risk …

In this paper we argue that both statistics and economic theory-based evidence largely indicate the absence of long run …

In this paper we argue that both statistics and economic theory-based evidence largely indicate the absence of long run …

exogenous risk and delegation. That is, we show that only if exogenous risk is sufficiently large, the risk-neutral principal … may prefer to delegate authority over decisions to the risk-averse agent. Intuitively, for incentive reasons, the … principal may optimally want to allow the agent to reduce his risk exposure. Nevertheless, even endogenous risk may be higher …

to meet their financial obligations. It is based on classical financial-statement approach, a direct inclusion of risk …

In the context of principal-agent theory risk is largely seen as a source that causes inefficiencies and lowers … tournament framework that risk in terms of chance is beneficial from the point of view of a profit maximizing principal who …

is a new risk factor for enterprises taking part in this system. In this paper, we analyze how risk emerging from … loss account accounting for uncertainties and dependencies. Consequently, this model provides a basis for risk assessment …

can undertake an active portfolio management strategy by investing in both risk-free and risky assets. Using a two …

even if the risk-free asset return is correlated with other risky assets' returns. However, equivalence fails to hold on an …