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Moral hazard with the (unlikely) possibility of catastrophes

Bednarek, Ziemowit; Patel, Pratish - In: Economics letters 124 (2014) 3, pp. 386-388

Persistent link: https://www.econbiz.de/10010495165

Backfired! Distorted Incentives in Wildfire Supression

Bradshaw, Karen - 2012

Wildfires’ increasing growth and spread have prompted aggressive approaches to fighting fire. The techniques used by … firefighting techniques. It provides a detailed case study of the technique of backfire — use of fire to fight fire — to … technique. The result is that enormous swaths of forest are burned to fight fire that could be suppressed with far less …

Persistent link: https://www.econbiz.de/10014169413

You don't always get what you pay for

Schnedler, Wendelin - 2007

Consider a principal-agent relationship in which more effort by the agent raises the likelihood of success. Does rewarding success, i.e., paying a bonus, increase effort in this case? I find that bonuses have not only an incentive but also an income effect. Overall, bonuses paid for success may...

Persistent link: https://www.econbiz.de/10003592884

Standards and incentives under moral hazard with limited liability

Reinshagen, Felix - 2012

We consider a model of moral hazard with limited liability of the agent and effort that is two-dimensional. One dimension of the agent's effort is observable and the other is not. The principal can thusmake the contract conditional not only on outcome but also on observable effort. The...

Persistent link: https://www.econbiz.de/10009490184

Fairness, incentives and contractual incompleteness

Fehr, Ernst; Klein, Alexander; Schmidt, Klaus M. - 2001

We show that concerns for fairness may have dramatic consequences for the optimal provision of incentives in a moral hazard context. Incentive contracts that are optimal when there are only selfish actors become inferior when some agents are concerned about fairness. Conversely, contracts that...

Persistent link: https://www.econbiz.de/10011398105

Public policy for venture capital

Keuschnigg, Christian; Nielsen, Søren Bo - 2001

This paper proposes a simple partial equilibrium model to investigate the effects of government policy on venture capital backed investments. Giving up an alternative career, entrepreneurs focus their effort on a single, high risk venture each. Venture capitalists acquire an equity stake and...

Persistent link: https://www.econbiz.de/10011398877

Value creation and value capture under moral hazard : exploring the micro-foundations of buyer- supplier relationships

Obloj, Tomasz; Zemsky, Peter - In: Strategic management journal 36 (2015) 8, pp. 1146-1163

Persistent link: https://www.econbiz.de/10011398906

Merger performance and managerial incentives

Kräkel, Matthias; Müller, Daniel - 2014

We consider a two-stage principal-agent model with limited liability in which a CEO is employed as agent to gather information about suitable merger targets and to manage the merged corporation in case of an acquisition. Our results show that the CEO systematically recommends targets with low...

Persistent link: https://www.econbiz.de/10011430291

Peer effects and incentives

Kräkel, Matthias - 2014

In a multi-agent setting, individuals often compare own performance with that of their peers. These comparisons influence agents incentives and lead to a noncooperative game, even if the agents have to complete independent tasks. I show that depending on the interplay of the peer effects, agents...

Persistent link: https://www.econbiz.de/10011430294

Promotion, turnover, and compensation in the executive labor market

Gayle, George-Levi; Golan, Limor; Miller, Robert Allen - In: Econometrica : journal of the Econometric Society, an … 83 (2015) 6, pp. 2293-2369

Persistent link: https://www.econbiz.de/10011431546

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