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Second-Degree Moral Hazard in a Real-World Credence Goods Market

Balafoutas, Loukas - 2014

Empirical literature on moral hazard focuses exclusively on the direct impact of asymmetric information on market outcomes, thus ignoring possible repercussions. We present a field experiment in which we consider a phenomenon that we call second-degree moral hazard – the tendency of the supply...

Persistent link: https://www.econbiz.de/10013061956

Job Assignments Under Moral Hazard : The Peter Principle Revisited

Koch, Alexander K. - 2008

The Peter Principle captures two stylized facts about hierarchies: first, promotions often place employees into jobs for which they are less well suited than for that previously held. Second, demotions are extremely rare. Why do organizations not correct 'wrong' promotion decision? This paper...

Persistent link: https://www.econbiz.de/10012773414

Hidden Action, Identification, and Organization Design

Schnedler, Wendelin - 2010

Incentives often fail in inducing economic agents to engage in a desirable activity; implementability is restricted …

Persistent link: https://www.econbiz.de/10013135820

Optimal Incentive Contracts Under Moral Hazard When the Agent is Free to Leave

Englmaier, Florian - 2010

We characterize optimal incentive contracts in a moral hazard framework extended in two directions. First, after effort provision, the agent is free to leave and pursue some ex-post outside option. Second, the value of this outside option is increasing in effort, and hence endogenous. Optimal...

Persistent link: https://www.econbiz.de/10013141421

Strategic Incomplete Contracts : Theory and Experiments

Erkal, Nisvan - 2015

We develop a model of strategic contractual incompleteness that identifies conditions under which principals might omit even costlessly verifiable terms. We then use experiments to test comparative statics predictions of the model. While it is well known that verifiability imperfections can...

Persistent link: https://www.econbiz.de/10013031190

The Response to Dynamic Incentives in Insurance Contracts with a Deductible : Evidence from a Differences-in-Regression-Discontinuities Design

Klein, Tobias J. - 2020

We develop a new approach to quantify how patients respond to dynamic incentives in health insurance contracts with a … large Dutch health insurer we find that individuals are forward-looking. Changing dynamic incentives by increasing the … annual level. The response to dynamic incentives is an important part of the overall effect of cost-sharing schemes on …

Persistent link: https://www.econbiz.de/10012837905

The Dilemma of Delegating Search : Budgeting in Public Employment Services

Addison, John T. - 2010

high-powered incentives for high levels of search effort on the part of job centers, we propose output-related schemes that …

Persistent link: https://www.econbiz.de/10013138264

Hidden Insurance in a Moral Hazard Economy

Bertola, Giuseppe - 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/10013071425

Altruism and Relational Incentives in the Workplace

Dur, Robert A. J. - 2013

. The contract may contain two types of incentives for the agent to work hard: a bonus and a threat of dismissal. We find …

Persistent link: https://www.econbiz.de/10013082165

Risk, Delegation, and Project Scope

Roider, Andreas - 2021

This paper studies a partial-contracting model where an agent may provide effort to increase a project's scope before some later decisions have to be taken. Consistent with existing empirical evidence, we find a positive relationship between exogenous risk and delegation. That is, we show that...

Persistent link: https://www.econbiz.de/10013316757