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Hidden insurance in a moral hazard economy

Bertola, Giuseppe; Koeniger, Winfried - 2013

We consider an economy where individuals privately choose effort and trade competitively priced securities that pay off with effort-determined probability. We show that if insurance against a negative shock is sufficiently incomplete, then standard functional form restrictions ensure that...

Persistent link: https://www.econbiz.de/10010225898

Business cycle effects of credit and technology shocks in a DSGE model with firm defaults

Pesaran, M. Hashem; Xu, TengTeng - 2011

This paper proposes a theoretical framework to analyze the impacts of credit and technology shocks on business cycle … financial institutions in the transmission of credit and technology shocks to the real economy. A positive credit shock, defined … between loan and deposit rates. The effects of the credit shock tend to be highly persistent even without price rigidities and …

Persistent link: https://www.econbiz.de/10009488413

The welfare effects of law enforcement in the illegal money lending market

Leong, Kaiwen; Li, Huailu; Pavanini, Nicola; Walsh, … - 2022

We estimate a structural model of borrowing and lending in the illegal money lending market using a unique panel survey of 1,090 borrowers taking out 11,032 loans from loan sharks. We use the model to evaluate the welfare effects of alternative law enforcement strategies. We find that a large...

Persistent link: https://www.econbiz.de/10013262951

Deception and incentives: how dishonesty undermines effort provision

Ederer, Florian (contributor); Fehr, Ernst (contributor) - 2007

In this paper we show that subtle forms of deceit undermine the effectiveness of incentives. We design an experiment in which the principal has an interest in underreporting the true performance difference between the agents in a dynamic tournament. According to the standard approach, rational...

Persistent link: https://www.econbiz.de/10003646717

Incentives and the sorting of altruistic agents into street-level bureaucracies

Buurman, Margaretha (contributor); … - 2008

Many street-level bureaucrats (such as caseworkers) have the dual task of helping some clients, while sanctioning others. We develop a model of such a street-level bureaucracy and study the implications of its personnel policy on the self-selection and allocation decisions of agents who differ...

Persistent link: https://www.econbiz.de/10003778977

Construction contracts (or : "how to get the right building at the right price?")

Chakravarty, Surajeet (contributor); … - 2006

economics ; incomplete contracts ; construction ; agency theory ; industry studies ; outsourcing ; procurement …

Persistent link: https://www.econbiz.de/10003323165

Task difficulty, performance measure characteristics, and the trade-off between insurance and well-allocated effort

Schnedler, Wendelin (contributor) - 2006

When designing incentives for a manager, the trade-off between insurance and a "good" allocation of effort across various tasks is often identified with a trade-off between the responsiveness (sensitivity, precision, signal-noise ratio) of the performance measure and its similarity (congruity,...

Persistent link: https://www.econbiz.de/10003323166

Gift exchange and workers' fairness concerns : when equality is unfair

Abeler, Johannes; Altmann, Steffen; Kube, Sebastian; … - 2009

We study how different payment modes influence the effectiveness of gift exchange as a contract enforcement device. In particular, we analyze how horizontal fairness concerns affect performance and efficiency in an environment characterized by contractual incompleteness. In our experiment, one...

Persistent link: https://www.econbiz.de/10003863658

Social interaction, co-worker altruism, and incentives

Dur, Robert A. J.; Sol, Joeri - 2009

Social interaction with colleagues is an important job attribute for many workers. To attract and retain workers, managers therefore need to think about how to create and preserve high-quality co-worker relationships. This paper develops a principal-multi-agent model where agents do not only...

Persistent link: https://www.econbiz.de/10003909134

Extrinsic rewards and intrinsic motives : standard and behavioral approaches to agency and labor markets

Rebitzer, James B.; Taylor, Lowell J. - 2010

Employers structure pay and employment relationships to mitigate agency problems. A large literature in economics documents how the resolution of these problems shapes personnel policies and labor markets. For the most part, the study of agency in employment relationships relies on highly...

Persistent link: https://www.econbiz.de/10008688992

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