This paper, instead of focusing on agency cost, analyzes the role of risk-sharing under problems of enforceability (default) to explain the optimal determination of capital structure. Optimal contract structure presents equity and debt.

The enterprise financial decision is a rational process for option to the optimal variant related to financing and investments. For the capital investment to be justified, the profitability of the invested money must be at least equal with the profitability of the alternative investment...

In this paper, we want to characterize the optimal health insurance contract with adverse selection and moral hazard. We assume that policyholders differ by the permanent health status loss and choose an unobservable preventive effort in order to reduce the probability of illness which is...

The investment decisions of small-scale farmers in developing countries are conditioned by their financial environment. Binding credit market constraints and incomplete insurance can reduce investment in activities with high expected profits. We conducted several experiments in northern Ghana in...

Every day insurance companies face a number of risks arising from the insurance industry itself, as well as risks arising from insurance company operations. In this constant fight against risks insurance companies use different models and methods that help them better understand, have a more...

The purpose of this paper is to challenge the conventional theory of moral hazard and adverse selection. Moral hazard and adverse selection problems in contemporary economic theory are plagued with four major aws: 1) the alleged asymmetrical information between buyer and seller as a problem in...

The paper reviews the evolution in insurance economics over the past 25 years, by first recalling the situation in 1973, then presenting the developments and new approaches which flourished since then. The paper argues that these developments were only possible because steady advances were made...

This article examines, under the Dual Theory of Choice (Yaari (1987)), the classical results and their extensions on self-insurance, self-protection and market insurance obtained by Ehrlich and Becker (1972) under the expected utility hypothesis. In particular, background risk, non-reliability,...

Severe natural catastrophes in the early nineties have brought about a lack of financial capacity in the catastrophe line of the global reinsurance market. The finance industry reacted to this situation by issuing innovative products designed to spread the excess risk more widely among...

”While analyzing the current economic crisis, which we can consider the first ever global crisis that started with banking problems, we are asking if this crisis was strictly a financial one or a crisis due to the phenomenon called globalization. What caused the global financial crisis was the...