We provide an integral condition for the ranking of general information systems in the agency problem. The condition has a straightforward economic interpretation in terms of the sensitivity of a cumulative distribution with respect to the agent's effort. The proposed criterion is shown to be...

We study the problem of deterring undesirable behavior in a moral hazard framework with risk averse individuals, noisy information and costly sanctions. We find that, if sanctions are a pure loss, a utilitarian society should use a bang-bang penalty scheme satisfying the maximum penalty...

This paper analyzes the cost and incentive properties of the standard of proof for a finding of negligence. In common law, the usual standard is for courts to decide on the basis of a so-called balance of probabilities or preponderance of the evidence. We show that, if producing information...

This paper analyzes the trade-off between monitoring and incentives in a principal-agent relationship with moral hazard. We derive general results on the optimal monitoring-incentives mix for the case where both parties are risk-neutral and the agent faces a limited liability constraint. We show...

This paper analyzes the incentive properties of the standard and burden of proof for a finding of negligence, when evidence about injurers' behavior is imperfect and rests with the parties. We show that the `preponderance of evidence' standard used in common law, together with ordinary exclusion...

The probability that an unskilled worker can be successfully trained and or screened to be a manager depends on the effort of the firm. With positive hiring costs, a firm prefers to train/screen its own managers. However the optimal size of the firm for productive efficiency may conflict with...

This paper studies the supply and demand for on-the- job training when the success of training is stochastic, firms have to pay hiring costs when they hire skilled workers from the outside, and firms have strictly concave production functions. There are predictions about firm level dynamics and...

A model where a portion of the population participates in illegal activities is developed. The propensity to participate in crimes depends on the probability and the opportunity cost of being arrested. The government can influence these variables by law enforcement expenditure and by social...

We model a simple justice system in which a court is mandated by society to assess the guilt and the punishment of an accused. The court takes prison facilities as given and neglects its impact on the cost to society of implementing the sentence. Clearly, the court, in this world, will condemn...

Cet article analyse la désirabilité sociale de l'assurance de responsabilité lorsque les comportements de prévention sont imparfaitement observables. On sait que l'assurance de responsabilité est socialement avantageuse en responsabilité sans faute, même s'il y a aléa moral et que...