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Liability Insurance under the Negligence Rule

Fagart, Marie-Cécile; Fluet, Claude - Centre Interuniversitaire sur le Risque, les Politiques … - 2007

We analyze the efficiency properties of the negligence rule with liability insurance, when the tort-feasor's behavior is imperfectly observable both by the insurer and the court. Efficiency is shown to depend on the extent to which the evidence is informative, on the evidentiary standard for...

Persistent link: https://www.econbiz.de/10005015315

The First-Order Approach when the Cost of Effort is Money

Fagart, Marie-Cécile; Fluet, Claude - Centre Interuniversitaire sur le Risque, les Politiques … - 2012

We provide sufficient conditions for the first-order approach in the principal-agent problem when the agent’s utility has the non-separable form u(y - c(a)) where y is the contractual payoff and c(a) is the money cost of effort. We first consider a decision-maker facing prospects which cost...

Persistent link: https://www.econbiz.de/10010540951

Securitization and Optimal Retention under Moral Hazard

Malekan, Sara; Dionne, Georges - Centre Interuniversitaire sur le Risque, les Politiques … - 2012

quality to ensure that they can repay the loans, because the risk of delinquencies falls on investors rather than lenders. One …

Persistent link: https://www.econbiz.de/10010541212

Risk Classification in Insurance Contracting

Dionne, Georges; Rothschild, Casey G. - Centre Interuniversitaire sur le Risque, les Politiques … - 2011

Risk classification refers to the use of observable characteristics by insurers to group individuals with similar … expected claims, compute the corresponding premiums, and thereby reduce asymmetric information. An efficient risk … classification system generates premiums that fully reflect the expected cost associated with each class of risk characteristics …

Persistent link: https://www.econbiz.de/10009369377

A Review of Recent Theoretical and Empirical Analyses of Asymmetric Information in Road Safety and Automobile Insurance

Dionnne, Georges; Michaud, Pierre-Carl; Pinquet, Jean - Centre Interuniversitaire sur le Risque, les Politiques … - 2012

Road safety policies and automobile insurance contracts often use incentive mechanisms based on traffic violations and accidents to promote safe driving. Can these mechanisms improve road safety efficiently? Do they reduce asymmetric information between drivers and insurers and regulators? In...

Persistent link: https://www.econbiz.de/10010615164

Risk Classification and Health Insurance

Dionne, Georges; Rothschild, Casey G. - Centre Interuniversitaire sur le Risque, les Politiques … - 2012

Risk classification refers to the use of observable characteristics by insurers to group individuals with similar … expected claims, compute the corresponding premiums, and thereby reduce asymmetric information. With perfect risk … classification, premiums fully reflect the expected cost associated with each class of risk characteristics and yield efficient …

Persistent link: https://www.econbiz.de/10010693198

Buy-it-Now Prices in eBay Auctions-The Field in the Lab

Grebe, Tim; Ivanova-Stenzel, Radosveta; Kröger, Sabine - Centre Interuniversitaire sur le Risque, les Politiques … - 2009

This article is an experimental investigation on decision making in online auction markets. We focus on a widely used format, the Buy-It-Now auction on eBay, where sellers post prices at which buyers can purchase a good prior to an auction. Even though, buyer behavior is well studied in...

Persistent link: https://www.econbiz.de/10008472117

Noisy Learning and Price Discrimination: Implications for Information Dissemination and Profits

Gendron-Saulnier, Catherine; Santugini, Marc - Centre Interuniversitaire sur le Risque, les Politiques … - 2013

We study third-degree price discrimination in the presence of uninformed buyers who extract noisy information from observing prices. In a noisy learning environment, price discrimination can be detrimental to the firm and beneficial to the consumers. On the one hand, discriminatory pricing...

Persistent link: https://www.econbiz.de/10011252852

Integrating Real and Financial Decisions of the Firm

Mirman, Leonard J.; Salgueiro, Egas M.; Santugini, Marc - Centre Interuniversitaire sur le Risque, les Politiques … - 2013

We study the issue of integrating real and financial decisions in a monopoly firm with risk-averse decision-makers. To … to risk-sharing and an increase in production, but only the competitive case is Pareto optimal. When either the firm or … the outside investors act as leaders, the optimal risk-sharing is distorted to favor the leader. We also discuss the …

Persistent link: https://www.econbiz.de/10011263110

Campaign Promises and Political Factions

Panova, Elena - Centre Interuniversitaire sur le Risque, les Politiques … - 2008

This paper builds a dynamic model of electoral competition with nonbinding campaign promises. We find that campaign promises by a candidate for office signal her political preferences and public policy that she intends to implement. The reason is that electoral competition induces her to pander...

Persistent link: https://www.econbiz.de/10005015220