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We argue that risk sharing motivates the bank-wide structure of bonus pay. In the presence of financial frictions that make external financing costly, the optimal contract between shareholders and employees involves some degree of risk sharing whereby bonus pay partially absorbs earnings shocks....
Persistent link: https://www.econbiz.de/10012892088
We study the interplay between tenure decisions, stock market investment and the public social security system. Housing equity not only serves a dual purpose as a consumption good and as an asset, but also provides insurance to buffer various risks in retirement. Our life cycle model captures...
Persistent link: https://www.econbiz.de/10012864931
We introduce a model of the banking sector that formally incorporate a buffer function of capital. Heterogeneous banks choose their portfolio risk, bank size, and capital holdings. Banks voluntarily hold equity when the buffer effect against the risk of default outweighs the cost advantages of...
Persistent link: https://www.econbiz.de/10013308111
through asset building. The theoretical and empirical results indicate that an increase in the initial level of competition … implies greater export incentive. However, over the life cycle of a firm, the role of competition is impacted by the intensity … of capital accumulation and the initial level of wealth. Greater local competition before the entry of firms in the …
Persistent link: https://www.econbiz.de/10012836956
of multi-homing on both sides is mostly ignored in the literature on competition between two-sided platforms. We help … fill this gap by developing a model for platform competition in a differentiated setting (a Hoteling line), which is …
Persistent link: https://www.econbiz.de/10012840538
We integrate a market microstructure model with an exchange competition model with entry in which exchanges supply … strategic substitutes or complements in platform competition. Free entry of platforms delivers a superior outcome in terms of …
Persistent link: https://www.econbiz.de/10012892152
We focus on the estimation of market entry costs that are declining over time and evaluate their impact on competition …
Persistent link: https://www.econbiz.de/10012822507
We develop a dynamic model of hospital competition where (i) waiting times increase if demand exceeds supply; (ii …
Persistent link: https://www.econbiz.de/10012866383
The emergence of competition is a defining aspect of human nature and characterizes many important social environments …
Persistent link: https://www.econbiz.de/10012866401
I show how changes in competition affect the power of reputation to induce sellers to exert effort. The impact of … competition on sellers' incentives is theoretically ambiguous. More competition disciplines sellers, but, at the same time, it … the value of building a reputation through effort. In this framework, more competition depresses hosts' profits and leads …
Persistent link: https://www.econbiz.de/10012857911