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Cox, Gary W. - 2020

How do parties motivate candidates to exert effort in closed-list elections? If each candidate's primary goal is winning a seat, then those in safe and hopeless list positions have weak incentives to campaign. We present a model in which (i) candidates care about both legislative seats and the...

Persistent link: https://www.econbiz.de/10012830995

Wage Risk and the Skill Premium

Slavík, Ctirad - 2020

, individual wage risk has also increased. This paper proposes a mechanism through which a rise in wage risk increases the skill … premium. Intuitively, a rise in uninsured wage risk increases precautionary savings, thereby boosting capital accumulation … that the rise in wage risk observed between 1967 and 2010 increases the skill premium significantly. This finding is robust …

Persistent link: https://www.econbiz.de/10012824576

Stochastic Contracts and Subjective Evaluations

Lang, Matthias - 2021

Subjective evaluations are widely used, but call for different contracts from traditional moral-hazard settings. Previous literature shows that contracts require payments to third parties, which real-world contracts rarely use. I show that the implicit assumption of deterministic contracts makes...

Persistent link: https://www.econbiz.de/10013311715

The Pygmalion effect : an agency model with reference dependent preferences

Daido, Kohei; Itoh, Hideshi - 2005

We attempt to formulate and explain two types of self-fulfilling prophecy, called the Pygmalion effect (if a supervisor thinks her subordinates will succeed, they are more likely to succeed) and the Galatea effect (if a person thinks he will succeed, he is more likely to succeed). To this...

Persistent link: https://www.econbiz.de/10010261169

Natural Disasters, Moral Hazard, and Special Interests in Congress

Kaplan, Carol - 2019

We exploit the precise timing of natural disasters to provide empirical evidence on the connection between electoral accountability and politicians’ support for special interests. We show that, in the immediate aftermath of a disaster, the evening news substantially reduce their coverage of...

Persistent link: https://www.econbiz.de/10012892175

Deposit Insurance, Moral Hazard and Bank Risk

Karas, Alexei; Pyle, William; Schoors, Koen J. L. - 2021

Using evidence from Russia, we explore the effect of the introduction of deposit insurance on bank risk. Drawing on … that larger declines in market discipline generate larger increases in traditional measures of risk. These results hold in …

Persistent link: https://www.econbiz.de/10013249648

Competitive Procurement with Ex Post Moral Hazard

Chakraborty, Indranil; Khalil, Fahad; Lawarree, Jacques - 2021

Unlike standard auctions, we show that competitive procurement may optimally limit competition or use inefficient allocation rules that award the project to a less efficient firm with positive probability. Procurement projects often involve ex post moral hazard after the competitive process is...

Persistent link: https://www.econbiz.de/10013249652

When Pro-Poor Microcredit Institutions Favor Richer Borrowers - A Moral Hazard Story

Biancini, Sara; Venet, Baptiste; Ettinger, David - 2021

We suggest an explanation for the existence of “mission drift”, the tendency for Microfinance Institutions (MFIs) to lend money to wealthier borrowers rather than to the very poor. We focus on the relationship between MFIs and external funding institutions. We assume that both the MFIs and...

Persistent link: https://www.econbiz.de/10013245624

Advantageous Selection Without Moral Hazard (with an Application to Life Care Annuities)

De Donder, Philippe; Leroux, M.‐L; Salanié, François - 2022

motivate its advent by differences in risk-aversion among agents, implying different prevention efforts. We argue that it may … also appear in the absence of moral hazard, when agents only differ in riskiness and not in (risk) preferences. We first … selection may occur when several contracts are offered, when agents also face a non-insurable background risk, or when agents …

Persistent link: https://www.econbiz.de/10014083046

Moral Hazard in Drug Purchases

Harju, Jarkko; Verho, J - 2023

We study the moral hazard effects of the drug copayment threshold in Finland using detailed prescription drug purchase data. The analysis reveals that the average drug costs increase discontinuously by 17% at the threshold above which out-of-pocket drug costs decrease substantially. Our results...

Persistent link: https://www.econbiz.de/10014347995

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