substantially increasing the risk borne by contractors …

This paper presents a market equilibrium model of CEO assignment, pay and incentives under risk aversion and … distorted by the agency problem as firms involving higher risk or disutility choose less talented CEOs. Such firms also pay … higher salaries in the cross-section, but economy-wide increases in risk or the disutility of being a CEO (e.g. due to …

Empirical work testing for a negative tradeoff between risk and incentives, a cornerstone of agency theory, has not had …

intensity is shown to induce a higher default rate and to raise the country risk as reflected in the interest rate associated … default penalty eliminates the adverse effects of country risk on expected income. For such an economy a contingency plan that … effective magnitude of country risk and the incidence of default …

provision of marginal incentives, and applies the theory to explain variation in the form of compensation of over-the-road truck … of hauls in a way that is consistent with the theory. By contrast, we find that vehicle ownership, which defines a driver …

insurer risk retention. We then use panel data on U.S. property liability reinsurance to test the model. The empirical results …

trade off between risk and return. Banks may mitigate the resultant excessive risk by costly monitoring, where greater risk … reduction requires more resources devoted to risk supervision. Hence, the excessive risk associated with moral hazard is … endogenously determined. We show that a drop in banks' cost of funds increases the risk tolerated by banks in a competitive …