to rely on explicit incentives, allowing the principal and agent to reduce transaction costs by using incomplete …

When Insurers Go Bust applies agency theory and the theories of adverse selection and moral hazard as the motivation …, and transparency. In consequence, ruin theory does not have an operational role. Theory is applied in familiar ways that … inappropriate emphasis on the general theory of excessive risk-taking, which tends to deflect attention from the specific nature of …

Theoretical research argues that convertible bonds mitigate the contracting costs of moral hazard, adverse selection …, and financial distress. Using firm-specific and macroeconomic factors of the contracting costs, we examine the extent to … hazard, adverse selection, and expected financial distress costs are all important determinants of the likelihood of issuing …

We analyze whether fluctuation in economy-wide factors cause time-series variation in the contracting costs of moral … announcement period abnormal returns as one measure of the overall contracting costs of debt issues, we specifically study whether … economy-wide factors affect the impact of firm-specific measures of contracting costs on the abnormal returns. We find that …