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Contracting with altruistic agents under moral hazard
AUBERT, Cecile - Econometric Society - 2004
In principal-agent settings with moral hazard, the fact that agents are altruistic vis-a-vis third parties (e.g. their family) modifies incentive costs. We derive sufficient conditions for the principal to benefit from altruism. They bear on how altruism affects the agent's marginal rate of...
Persistent link: https://www.econbiz.de/10005342252
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Compensation of venture capitalists with two principals
Kim, Sung Hyun - Econometric Society - 2004
incentives under the heavy information asymmetry (Sahlman, 1982, J. Financial Economics) In this paper, we consider how to design …
Persistent link: https://www.econbiz.de/10005342368
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The trade-off between incentives and endogenous risk
Araujo, Aloisio; Moreira, Humberto - Econometric Society - 2004
Standard models of moral hazard predict a negative relationship between risk and incentives, but the empirical work has … incentives decreases with risk aversion, more risk-averse agents prefer lower-incentive contracts; thus, in the optimal contract …, incentives are positively correlated with endogenous risk. In contrast, if risk aversion is high enough, the possibility of …
Persistent link: https://www.econbiz.de/10005129782
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The trade-off between incentives and endogenous risk
Araujo, Aloisio; Moreira, Humberto - Econometric Society - 2004
Standard models of moral hazard predict a negative relationship between risk and incentives, but the empirical work has … incentives decreases with risk aversion, more risk-averse agents prefer lower-incentive contracts; thus, in the optimal contract …, incentives are positively correlated with endogenous risk. In contrast, if risk aversion is high enough, the possibility of …
Persistent link: https://www.econbiz.de/10005063697
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Sources of Corporate Financing and Economic Crisis in Korea: A Micro-evidence
LIM, Youngjae - Econometric Society - 2004
credit from large firms to small firms. Is this shift due to lenders’ choice or due to borrowers’ changed incentives? The …
Persistent link: https://www.econbiz.de/10005342312
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Why Issue Mandatory Convertibles? Theory and Empirical Evidence.
Yan, An; Nandy, Debarshi; Chemmanur, Thomas - Econometric Society - 2004
Abstract Mandatory convertibles, which are equity-linked hybrid securities that automatically convert to common stock on a pre-specified date, have become an increasingly popular means of raising capital in recent years (about $20 billion worth issued in 2001 alone). This paper presents the...
Persistent link: https://www.econbiz.de/10005063613
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Interest Rates in Trade Credit Markets
Moreira, Humberto; Novaes, Walter; Barbosa, Klenio - Econometric Society - 2004
There is evidence that suppliers have private information about their customers' credit risk. Yet, interest rates in trade credit markets are usually industry-not-firm specific. Why? If the demand for intermediate products is inelastic, suppliers should raise interest rates until they reach...
Persistent link: https://www.econbiz.de/10005699601
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Efficient Delegation by an Informed Principal
Gresik, Thomas A.; Bond, Eric W. - Econometric Society - 2004
Consider the case of a firm with private valuation information bargaining with a supplier over the price and quantity of a good. If the firm and the supplier bargain directly, the bargaining outcome may not yield a first-best outcome due to the presence of information rents. The question we...
Persistent link: https://www.econbiz.de/10005328937
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Can Information Heterogeneity Explain the Exchange Rate Determination Puzzle?
Wincoop, Eric van; Bacchetta, Philippe - Econometric Society - 2004
Empirical evidence shows that macroeconomic fundamentals have little explana-tory power for nominal exchange rates. On the other hand, the recent “microstruc-ture approach to exchange rates” has shown that most exchange rate volatility at short to medium horizons is related to order flows....
Persistent link: https://www.econbiz.de/10005328945
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Public and Private Information in Monetary Policy Models
Shin, Hyun Song; Amato, Jeffery D. - Econometric Society - 2004
We examine the impact of public information in an economy where agents also have diverse private information. Our work builds on seminal contributions by Townsend (1983) and Phelps (1983), and more recently Woodford (2002), which emphasized the importance of higher-order beliefs – that is,...
Persistent link: https://www.econbiz.de/10005328974