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On Repeated Moral Hazard with a Present Biased Agent
Balletta, Luigi; Immordino, Giovanni - Centro Studi di Economia e Finanza (CSEF) - 2013
This paper introduces time inconsistent preferences into a moral hazard setting where the agent is risk-averse. We …. Finally, we show that in a setting with a risk-neutral agent and limited liability everything is as if the principal faces a …
Persistent link: https://www.econbiz.de/10010801006
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Sorting the Good Guys from Bad: On the Optimality of Deterministic Audit with Ex-Ante Information Acquisition
Menichini, Annamaria; Simmons, Peter - Centro Studi di Economia e Finanza (CSEF) - 2008
In a costly state verification model under commitment the principal may acquire a costly public and imperfectly revealing signal before or after contracting. If the project remains profitable after all signal realisations, optimally the signal is collected, if at all, after contracting, and it...
Persistent link: https://www.econbiz.de/10005750365
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Contracts with Wishful Thinkers
Menichini, Annamaria; Immordino, Giovanni; Romano, … - Centro Studi di Economia e Finanza (CSEF) - 2010
Managers with anticipatory emotions have higher current utility if they are optimistic about the future. We study an employment contract between an (endogenously) optimistic manager and realistic investors. The manager faces a trade-off between ensuring that the chosen levels of effort reflect...
Persistent link: https://www.econbiz.de/10008646907
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Advantageous Selection in the Private Hospital Insurance Market in Europe: Evidence on the Role of Education and Cognitive Ability
Avitabile, Ciro - Centro Studi di Economia e Finanza (CSEF) - 2009
50+, in eight European countries. I first test whether, conditional on health insurance companies' risk assessments …, individuals have residual private information on insurance determinants other than their risk type. My results show that there are … health information is an important determinant of the decision to buy private hospital health insurance for individuals aged …
Persistent link: https://www.econbiz.de/10005750346
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Optimal Contracting with Altruism and Reciprocity
Bassi, Matteo; Pagnozzi, Marco; Piccolo, Salvatore - Centro Studi di Economia e Finanza (CSEF) - 2013
Motivated by the recent experimental evidence on altruistic behavior, we study a simple principal-agent model where each player cares about other players’ utility, and may reciprocate their attitude towards him. We show that, relative to the selfish benchmark, efficiency improves when players...
Persistent link: https://www.econbiz.de/10011082502
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Reciprocity in the Principal Multiple Agent Model
Marco, Giuseppe De; Immordino, Giovanni - Centro Studi di Economia e Finanza (CSEF) - 2012
This paper studies how incentives are affected by intention-based reciprocity preferences when the principal hires many agents. Our results describe the agents' psychological attitudes required to sustain a given strategy profile. We also show that hiring reciprocal agents to implement a first...
Persistent link: https://www.econbiz.de/10010942479
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A Simple Impossibility Result in Behavioral Contract Theory
Menichini, Annamaria; Immordino, Giovanni; Romano, … - Centro Studi di Economia e Finanza (CSEF) - 2010
induce a positive interim emotional effect. We show that it may be impossible to achieve the first-best, even though the risk …
Persistent link: https://www.econbiz.de/10008683346
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Is Historical Cost Accounting a Panacea? Market Stress, Incentive Distortions, and Gains Trading
Ellul, Andrew; Jotikasthira, Chotibhak; Lundblad, … - Centro Studi di Economia e Finanza (CSEF) - 2014
regulations, alter financial institutions’ trading behavior. The insurance industry provides a natural laboratory to explore these …
Persistent link: https://www.econbiz.de/10010942483
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Information Sharing between Vertical Hierarchies
Pagnozzi, Marco; Piccolo, Salvatore - Centro Studi di Economia e Finanza (CSEF) - 2012
When do principals independently choose to share the information obtained from their privately informed agents? Information sharing affects contracting within competing organizations and induces agents’ strategies to be correlated through the distortions imposed by principals to obtain...
Persistent link: https://www.econbiz.de/10011082498
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Providing Financial Education: A General Equilibrium Approach
Padula, Mario; Pettinicchi, Yuri - Centro Studi di Economia e Finanza (CSEF) - 2013
Since the early 2000s, the importance of financial literacy for safe financial behaviors has increased in public debate and has been the motivation for several national and international institutions to launch and promote financial education initiatives. Although discussion on the effects of...
Persistent link: https://www.econbiz.de/10010800992