This article tests economies of scale and economies of scope for the property-casualty insurance companies in Japan. We fit a composite cost function to a set of Japanese firms over the period from 1980 to 1995 and employ an error components model. Our main findings are as follows. First,...

This paper analyzes optimal contracts for financing risky new projects in a two-period agency model. The principal and t he agent both learn about the project quality, and the agent's unobservable actions affect the learning process. The parties have access to the credit market. Compared to the...

This paper considers an agency model in which a principal delegates an agent authority to choose investment projects. The performance of the project depends stochastically on the agent's evaluation and operating efforts. The paper examines the conditions under which the principal prefers to...