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We conducted six treatments of a standard moral hazard experiment with hidden action. All treatments had identical Nash equilibria. However, the behavior in all treatments and periods was inconsistent with established agency theory (Nash equilibrium). In the early periods of the experiment,...
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In a laboratory experiment with 754 participants, we study the canonical one-shot moral hazard problem, comparing treatments with unobservable effort to benchmark treatments with verifiable effort. In our experiment, the players endogenously negotiate contracts. In line with contract theory, the...
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This paper presents a moral hazard model analyzing the agent's incentive to commit corporate crime. The principal can only observe profits which the agent can increase by committing crime or exerting effort. It is shown how different incentive contracts, i.e., thresholdlinear, capped bonus and...
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, affects trust and return on investment (ROI) in situations where the investor-entrepreneur interaction is affected by moral … hazard and asymmetric information. We model a repeated trust problem between investors and entrepreneurs, featuring moral … that trust and ROI may decline as quality improves. Although lenders tend to reduce the requirements for granting initial …
Persistent link: https://www.econbiz.de/10015337757