Showing 1 - 10 of 206
crucial novel feature is the competition between lenders in their choice of contracts offered. The quality of investment … distribute themselves across all offered contracts. Competition between banks introduces three possibilities for a breakdown of … lenders, which may make lending altogether unprofitable. Second, banks can have an incentive to offer a debt contract and …
Persistent link: https://www.econbiz.de/10005661861
This paper analyzes the impact of labor market competition and skill-biased technical change on the structure of … compensation. The model combines multitasking and screening, embedded into a Hotelling-like framework. Competition for the most … perfect competition, the resulting efficiency loss can be larger than that imposed by a single firm or principal, who distorts …
Persistent link: https://www.econbiz.de/10011083769
We consider a simple model of competition under moral hazard with constant return technologies. We consider preferences …-income levels. We show that, in this context, Bertrand competition may result in positive equilibrium profit. This result holds for … purely idiosyncratic shocks when only deterministic contracts are considered, and extends to unrestricted contract spaces in …
Persistent link: https://www.econbiz.de/10005661960
The paper shows that an increase in competition has two effects on managerial incentives: it increases the probability … where increased competition unambiguously reduces managerial slack. In general, however, this relation need not be monotonic … enter the market, but will eventually decrease when competition becomes too intense. …
Persistent link: https://www.econbiz.de/10005124445
We study the effects of reputation and competition in a stylized market for experience goods. If interaction is …, we find that competition, coupled with some minimal information, eliminates the trust problem almost completely. …
Persistent link: https://www.econbiz.de/10005136615
Evidence suggests that unemployed individuals can sometimes affect their job prospects by undertaking a costly action like deciding to move or retrain. Realistically, such an opportunity only arises for some individuals and the identity of those may be unobservable ex-ante. The problem of...
Persistent link: https://www.econbiz.de/10005504238
riskiness of the portfolio. This represents a departure from the existing literature on agency theory in that moral hazard is … conditions, there exists a first-best contract which takes the form of a bonus contract. In the latter, we show that there exists … no first-best contract and we use a numerical approximation to study the properties of the second-best contract …
Persistent link: https://www.econbiz.de/10005504241
This paper analyses the impact of labour demand and labour market regulations on the corporate structure of fims. It finds that higher wages are associated with lower monitoring, irrespective of whether these high wages are caused by labour market regulations, unions or higher labour demand....
Persistent link: https://www.econbiz.de/10005504251
We investigate the presence of moral hazard and advantageous or adverse selection in a market for supplementary health insurance. For this we specify and estimate dynamic models for health insurance decisions and health care utilization. Estimates of the health care utilization models indicate...
Persistent link: https://www.econbiz.de/10005504294
In the 'Knightian' theory of entrepreneurship, entrepreneurs provide insurance to workers by paying fixed wages and …
Persistent link: https://www.econbiz.de/10005504306