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, the paper bridges the gulf between (1) the banking literature that studies moral hazard effects of bank regulation without … the microeconomics of bank production without explicitly considering how banks' production decisions influence their … bank managers cost minimization versus value maximization are estimated using U.S. data on highest-level bank holding …
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We argue for a shift in the focus of modeling production from the traditional assumptions of profit maximization and cost minimization to a more general assumption of managerial utility maximization that can incorporate risk incentives into the analysis of production and recover value-maximizing...
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