, we study the implications of the interaction between incentive compatibility and participation constraints for risk …

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 …

This study analyzed the principal-agent problem, in which the agent performs risk management tasks, and considered the …

/or investments in process reliability when contracting two risk-averse suppliers. We consider that these investments can be subject …