Biais, Bruno (contributor); Rochet, Jean-Charles (contributor) - 2009
fundamental value of the innovation: is it strong or fragile? Second, it is difficult to monitor managers, which creates moral … hazard. Because of moral hazard, managers earn agency rents in equilibrium. As time goes by and profits are observed, beliefs … increasingly confident managers end up requesting very large rents, which curb the growth of the speculative sector. If rents …
