We use a novel data set containing all corporate loans throughout the Eurozone to document a series of novel stylized facts on the relationship between collateral and the probability of default. First, we show that the pervasive empirical finding that riskier borrowers pledge collateral is...

We study how public school teachers use paid sick leave. Most US sick leave schemes operate as individualized credit accounts: Paid leave is earned, and unused leave accumulates. We construct a unique dataset of daily leave balances and behavior among 982 teachers for 2010–2018. Sick leave use...

We study the economics of homeowners' property insurance by examining how contract design balances the trade-off between incentive alignment and risk sharing. Using granular contract-level property insurance data merged with property-level disaster risk for millions of U.S. households, we...

Moral hazard in health insurance arises when insured individuals are incentivized to over-utilize healthcare services, especially when they face low out-of-pocket costs. While existing literature primarily addresses moral hazard through qualitative studies, this paper introduces a quantitative...

For workers facing uncertain output, fixed-wage contracts provide implicit insurance compared to self-employment or performance-based pay. But like any insurance product, these contracts are prone to market distortions through moral hazard and adverse selection. Using a model of wage contracts...

In this study, we examine two adjudication methods designed to resolve disputes between principals and agents concerning bonus payments in relationships characterized by moral hazard and where the parties have been forced to use soft, imprecise, and subjective information to align incentives....

Die Anfälligkeit der Lieferketten europäischer Unternehmen gegenüber politisch bedingten Störungen und die festgestellte Bereitschaft autoritärer Regime zur Ausnutzung wirtschaftlicher Abhängigkeiten haben deutlich gemacht, wie wichtig es für Staaten und Unternehmen ist, geopolitische...

Direct evidence on variations in work incentives across different property rights systems remains scarce. This paper examines absenteeism among individuals employed in worker cooperatives - firms that are ultimately controlled by their workforce. By leveraging employment data matched with sick...

This paper analyzes the private production of safe assets and its implications for financial stability. Financial intermediaries (FIs) originate loans, exert hidden effort to improve loan quality, and create safe assets by issuing debt backed by the safe payments from (i) their own loans and...

We leverage decades of administrative data and quasi-experimental variation in the introduction of universal long-term care (LTC) insurance in Germany in 1995 to examine whether health insurance expansions can stimulate local economies. We find that the LTC insurance rollout led not only to...

This paper provides a structural analysis of the role of job vacancy referrals (VRs) by public employment agencies in the job search behavior of unemployed individuals, incorporating institutional features of the monitoring of search behavior by the agencies. Notably, rejections of VRs may lead...

We study quality upgrading in informal markets through two experiments with street-food vendors and consumers in India. First, we define quality in terms of food safety and develop a context-specific measurement framework. Second, we show that consumers are willing to pay substantial premiums...

Extending health insurance to previously uncovered populations can improve access to preventative health care alongside income effects resulting from lower need of out-of-pocket. However, theoretically, in the presence of ex-ante moral hazard, it can also give a disincentive to preventative...

Extending health insurance to previously uncovered populations can improve access to preventative health care alongside income effects resulting from lower need of out-of-pocket. However, theoretically, in the presence of ex-ante moral hazard, it can also give a disincentive to preventative...

Performance-contingent pay raises productivity, yet in the German Socio-Economic Panel (SOEP) only about 16% of workers report receiving performance pay, with the incidence being roughly seven percentage points higher among university graduates than among non-graduates. This coexistence of low...

Global fertility is declining, yet it remains unclear whether and how climate-related hazards contribute to realized fertility change. This paper combines global fertility data with disaster records for 1950–2023 to estimate fertility responses to climate-related hazards, distinguishing...

This study examines the effect of a pollution liability insurance mandate on corporate environmental compliance in Shenzhen, China. We employ a triple differences design, comparing electroplating and circuit board manufacturing firms, mandated to purchase insurance, to industries and a...

This study investigates how an increase in the quality of business ventures, measured as their success probability, 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...

Using a panel data approach with bank-fixed effects, we study the impact of Targeted Longer-Term Refinancing Operations (TLTRO) on banks’ risk, given by their distance to default (DtD). The study aims to determine if the liquidity from TLTROs influences banks’ risk-taking behaviour. For the...

Political parties play a crucial gatekeeping role in elections, including controlling electoral resources, candidate recruitment, and electoral list compositions. In making these strategic choices, parties aim to encourage candidates to invest in the campaign, while also trying to secure...

This paper explores how the persistence of past choices creates incentives in a continuous time stochastic game involving a large player (e.g., a firm) and a sequence of small players (e.g., customers). The large player faces moral hazard and her actions are distorted by a Brownian motion....

This article reviews the current debate about sick pay mandates and medical leave in the United States. The United States is one of three industrialized countries that do not guarantee access to paid sick leave for all employees. We first provide a categorization of the different paid leave...

Trading the cost of better performance off the probability that an imprecise test’s performance estimate falls short of the pass threshold, an assessee may perform above the threshold (and fear failure because of negative errors) or below it (and hope to pass because of positive errors). This...

Health insurance premiums often do not reflect individual health risks, implying redistribution from individuals with low health risks to individuals with high health risks. This paper studies whether more cost-sharing leads to less redistribution and to lower welfare of high-risk individuals....

The availability of bank loans is a vital component in determining the investment and spending patterns that influence economic growth. This article examines the threshold effect of loan growth on non-performing loans (NPLs) in the Zimbabwean banking industry during dollarization. The study...

We consider an organization with two projects which have productive spillovers. Three agents are active in this organization: two agents, each specialized in one project, and the CEO, who is a generalist. The organization owner first allocates authority over each project to these three...