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Observing Unobservables: Identifying Information Asymmetries with a Consumer Credit Field Experiment

Karlan, Dean S.; Zinman, Jonathan - C.E.P.R. Discussion Papers - 2007

Information asymmetries are important in theory but difficult to identify in practice. We estimate the presence and importance of adverse selection and moral hazard in a consumer credit market using a new field experiment methodology. We randomized 58,000 direct mail offers issued by a major...

Persistent link: https://www.econbiz.de/10005497798

Risk-bearing and Entrepreneurship

Newman, Andrew - C.E.P.R. Discussion Papers - 2007

In the 'Knightian' theory of entrepreneurship, entrepreneurs provide insurance to workers by paying fixed wages and bear all the risk of production. This paper endogenizes entrepreneurial risk by allowing for optimal insurance contracts as well as the occupational self-selection. Moral hazard...

Persistent link: https://www.econbiz.de/10005504306

Incentives Versus Sorting in Tournaments: Evidence from a Field Experiment

Leuven, Edwin; Oosterbeek, Hessel; Sonnemans, Joep; van … - C.E.P.R. Discussion Papers - 2008

A vast body of empirical studies lends support to the incentive effects of rank-order tournaments. Evidence comes from … tournaments may bias these non-experimental studies, whereas short task duration or lack of distracters may limit the external … where students selected themselves into tournaments with different prizes. Within each tournament the best performing …

Persistent link: https://www.econbiz.de/10005136509

World Finance and the US 'New Economy': Risk Sharing and Risk Exposure

Miller, Marcus; Zhang, Lei - C.E.P.R. Discussion Papers - 2005

The promising prospect of a ‘New Economy’ in the US attracted substantial equity inflows in the late 1990s, helping to finance the country’s burgeoning current account deficit. After peaking in 2000, however, US stocks fell by some 8 trillion dollars in value. To assess the welfare effects...

Persistent link: https://www.econbiz.de/10005123520

Capital Redistribution and the Market Allocation of Firm-Ownership

Grüner, Hans Peter; Schils, Ruediger - C.E.P.R. Discussion Papers - 2002

This Paper studies the relationship between political wealth redistribution and the allocation of firm-ownership when production requires an unobservable input. The economy's wealth distribution affects the equilibrium interest rate and the allocation of entrepreneurial rents because wealth...

Persistent link: https://www.econbiz.de/10005123568

Performance Indicators for Quality with Adverse Selection, Gaming and Inequality Aversion

Kuhn, Michael; Siciliani, Luigi - C.E.P.R. Discussion Papers - 2007

Performance indicators are increasingly used to regulate quality in health care and other areas of the public sector. We develop a model of contracting between a purchaser (principal) and a provider (agent) under the following scenarios: a) higher ability increases quality directly and...

Persistent link: https://www.econbiz.de/10005123654

Aggregate Risk, Political Constraints and Social Security Design

D'Amato, Marcello; Galasso, Vincenzo - C.E.P.R. Discussion Papers - 2002

In a stochastic environment, with political constraints, we analyse the behavior of a fully funded system, whose portfolio is composed of a risk free and a risky asset. When an aggregate negative shock hits, a large share of the wealth of the elderly is wiped out and office-seeking policy-makers...

Persistent link: https://www.econbiz.de/10005123758

Risk and Intermediation in a Dual Financial Market Model

Bloise, Gaetano; Reichlin, Pietro - C.E.P.R. Discussion Papers - 2001

This Paper investigates the relationship between risk and productive activity and the degree of financial intermediation in a model with moral hazard. Entreprenuers can simultaneously get credit from two types of competing institutions: ‘financial intermediaries’ and ‘local lenders’. The...

Persistent link: https://www.econbiz.de/10005123992

Moral Hazard and the Demand for Health Services: A Matching Estimator Approach

Barros, Pedro Luis Pita; Machado, Matilde Pinto; … - C.E.P.R. Discussion Papers - 2006

We estimate the impact of health insurance coverage beyond National Health Insurance on the demand for several health services. Traditionally, the literature has tried to deal with the endogeneity of the private (extra) insurance decision by finding instrumental variables. Since a priori...

Persistent link: https://www.econbiz.de/10005124045

Robin Hood's Compromise: Land Reforms, Inequality, Redistribution and Moral Hazard

Bandiera, Oriana; Levy, Gilat - C.E.P.R. Discussion Papers - 2004

This Paper analyses an unusually conservative type of redistribution. We take land from the very rich, as usual, but give it to the rich instead of the poor. We show that this type of reform reduces agency costs, thus increasing productivity, total surplus in the economy, and workers’ welfare....

Persistent link: https://www.econbiz.de/10005124299