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The Threat of Exclusion and Implicit Contracting

Brown, Martin - 2016

an implicit contract is the threat of exclusion: the agent fears that he will lose future income if the principal breaks …

Persistent link: https://www.econbiz.de/10012979617

Cooperation and Mistrust in Relational Contracts

Herz, Holger - 2016

Work and trade relationships are often governed by relational contracts, in which incentives for cooperative action today stem from the prospective future benefits of the relationship. In this paper, we study how reductions in clarity about the financial consequences of actions, induced by...

Persistent link: https://www.econbiz.de/10012981595

Flexible Contracts

Gottardi, Piero - 2012

requires the use of an appropriate incentive contract so as to realign his interests with those of the principal. The parties … of the optimal flexible contract both when the parties have sharp probabilistic beliefs over the possible events in which … risk aversion, the higher the agency costs for delegation and hence the less profitable is a flexible contract versus a …

Persistent link: https://www.econbiz.de/10013116425

Student Loans : When is Risk Sharing Desirable?

Eckwert, Bernhard - 2016

In higher education, pure credit market funding leads to underinvestment due to insufficient risk pooling, while pure income-contingent loan funding leads to overinvestment. We analyze whether funding diversity – a market structure in which credit markets coexist alongside income-contingent...

Persistent link: https://www.econbiz.de/10012997605

Risk Sharing in Defined-Contribution Funded Pension Systems

Beetsma, Roel M. W. J. - 2011

This paper explores the introduction of collective risk-sharing elements in defined contribution pension contracts. We consider status-contingent, age-contingent and asset contingent risk-sharing arrangements. All arrangements raise aggregate welfare, as measured by equivalent variations. While...

Persistent link: https://www.econbiz.de/10013118167

Complex Financial Networks and Systemic Risk : A Review

Bougheas, Spiros - 2014

In this paper we review recent advances in financial economics in relation to the measurement of systemic risk. We start by reviewing studies that apply traditional measures of risk to financial institutions. However, the main focus of the review is on studies that use network analysis paying...

Persistent link: https://www.econbiz.de/10013054029

Risk-Sharing and Contagion in Networks

Cabrales, Antonio - 2014

We investigate the trade-off between the risk-sharing gains enjoyed by more interconnected firms and the costs resulting from an increased risk exposure. We find that when the shock distribution displays “fat” tails, extreme segmentation into small components is optimal, while minimal...

Persistent link: https://www.econbiz.de/10013055377

Labor Market Pooling, Outsourcing and Labor Contracts

Picard, Pierre M.; Wildasin, David E. - 2014

Economic regions, such as urban agglomerations, face external demand and price shocks that produce income risk. Workers in large and diversified agglomerations may benefit from reduced wage volatility, while firms may outsource the production of intermediate goods and realize benefits from...

Persistent link: https://www.econbiz.de/10014204210

Finance, Labour, Capital, and International Integration

Bertola, Giuseppe - 2016

Labour incomes depend on structural as well as politico-economic factors, because labour market policies partially remedy the financial market imperfections that make labour income shocks difficult to insure, and have different implications for labour and capital income. This paper illustrates...

Persistent link: https://www.econbiz.de/10012994277

Minimum Wages and Relational Contracts

Fahn, Matthias - 2016

The need to give incentives is usually absent in the literature on minimum wages. However, especially in the service sector it is important how well a job is done, and employees must be incentivized to perform accordingly. Furthermore, many aspects regarding service quality cannot be verified,...

Persistent link: https://www.econbiz.de/10012985792

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