This paper studies a principal-agent relationship in a contractual crime setting. Suppose an agent and a principal sign a contract stipulating some transfer of funds from one player (say the agent) to the next (the principal) contingent on the state of the world announced by the first player. In...

This paper studies the effect of combining different insurance schemes on the efficiency of consumption smoothing in an environment without commitment. A savings account is introduced into the self-enforcing risk-sharing model of Thomas and Worrall (1988). The risk averse agent's savings play...

In an intertemporal consumption-saving model with uncertainty, liquidity constraints and habit formation, we have shown that habits can be a cushion against liquidity constraints by pushing even the impatient individual towards a choice of lower level of consumption. Dans un modèle...

In an intertemporal consumption-leisure choice model with wage uncertainty, and habit-forming consumption, we have shown that, consumption and leisure do move in opposite directions, consistent with the observed pro-cyclicy of aggregate hours worked. Dans un modèle intertemporel de consommation...

Children are seldom accounted for in household behavioural models. They are usually assumed to have neither the capacity nor the power to influence the household decision process. The literature on collective models has so far incorporated children through the caring preferences of their parents...

Recently, a new theoretical framework has been proposed to analyze the behavior of households composed of two adults. This approach, usually referred to has the collective model, assumes that spouses have distinct preferences and that household decisions are Pareto efficient. So far, most...

Parents care about their children, spend resources on educating them and bequeath them some physical and/or human capital. Here we argue that the actions of the parents have an influence, not only on the productive possibilities open to the children (through the capital they inherit) but also on...

Examining the global reinsurance market for catastrophic losses, we propose a new theory of optimal risk sharing that finds its inspiration in the economic theory of the firm. Our model offers a theoretical foundation for the vertical and horizontal tranching of insurance contracts (also known...

The purpose of this paper is to offer a glimpse into the potential industrial organization of the property casualty insurance (P&C) market if banks continue to penetrate it at current rates. To do so, we study an insurance market where banks are already integral in distribution: Title insurance....

Of the many fundamental questions left unanswered in finance, one relates to corporate risk management practices. My contention in this paper is that managerial habits and organizational inertia play an important role in the decision to purchase corporate insurance and engage in risk management...