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Moral hazard and agency relationship in sequential litigation
At, Christian; Gabuthy, Yannick - In: International Review of Law and Economics 41 (2015) C, pp. 86-90
The aim of this paper is to determine the optimal fee contract between a plaintiff and his lawyer in a trial process where liability and damages are treated sequentially: the court determines liability at the first stage and chooses damages at the second one. The plaintiff–lawyer relationship...
Persistent link: https://www.econbiz.de/10011189306
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Venture capital, double-sided adverse selection, and double-sided moral hazard
Houben, Eike - 2002 - First Version: March 2002, this Version: December 2002
The paper offers a new explanation for the widely observed use of redeemable and convertible preferred stock in venture capital finance. Redeemable and convertible preferred stocks can be used to endogenously allocate cash flow and control rights as a function of the state of nature, the...
Persistent link: https://www.econbiz.de/10011281511
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Umbrella branding and the provision of quality
Hakenes, Hendrik; Peitz, Martin - 2006
Consider a two-product firm that decides on the quality of each product. Product quality is unknown to consumers. If the firm sells both products under the same brand name, consumers adjust their beliefs about quality subject to the performance of both products. We show that if the probability...
Persistent link: https://www.econbiz.de/10010365881
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IMF's assistance : devil's kiss or guardian angel?
Brandes, Julia (contributor); Schüle, Tobias (contributor) - 2007
. Extending Morris and Shin (2006), we consider that the IMF's intervention policy usually exerts a signaling effect on private …'s signaling ability, our results state that repeated intervention is required to bail out a country, where by additional … assistance may induce moral hazard on the debtor side. Contrarily, if the IMF exerts a strong signaling effect, one single …
Persistent link: https://www.econbiz.de/10003636488
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Adverse Selection in Insurance Markets : On-Demand Contracts As a Screening Device
Braun, Alexander - 2020
We show that on-demand insurance contracts, an innovative form of coverage recently introduced through the InsurTech sector, can serve as a screening device. To this end, we develop a new adverse selection model consistent with Wilson (1977), Miyazaki (1977) and Spence (1978). Consumers have...
Persistent link: https://www.econbiz.de/10012822927
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Umbrella Branding and the Provision of Quality
Peitz, Martin; Hakenes, Hendrik - 2021
Consider a two-product firm that decides on the quality of each product. Product quality is unknown to consumers. If the firm sells both products under the same brand name, consumers adjust their beliefs about quality subject to the performance of both products. We show that if the probability...
Persistent link: https://www.econbiz.de/10013318794
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Employment dynamics in a signaling model with workers' incentives
Weingarden, Alison - 2016
firm's profitability from its employment decisions. I show that the resulting signaling model has pooling equilibria in …
Persistent link: https://www.econbiz.de/10011709242
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Dynamic Quality Signaling with Moral Hazard
Dilme, Francesc - 2012
idiosyncratic choices (actions done by the current owners). We introduce moral hazard in a dynamic signaling model where … refinements to the incorporation of moral hazard in dynamic signaling that implies uniqueness of equilibria. We find that similar … individual characteristics across types of sellers make everyone worse off, since competition increases signaling waste. Also …
Persistent link: https://www.econbiz.de/10014170975
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Default and Punishment in General Equilibrium
Dubey, Pradeep K.; Geanakoplos, John; Shubik, Martin - 2003
We extend the standard model of general equilibrium with incomplete markets to allow for default and punishment by thinking of assets as pools. The equilibrating variables include expected delivery rates, along with the usual prices of assets and commodities. By reinterpreting the variables, our...
Persistent link: https://www.econbiz.de/10014128751
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Default and Punishment in General Equilibrium
Dubey, Pradeep K.; Geanakoplos, John; Shubik, Martin - 2004
We extend the standard model of general equilibrium with incomplete markets to allow for default and punishment by thinking of assets as pools. The equilibrating variables include expected delivery rates, along with the usual prices of assets and commodities. By reinterpreting the variables, our...
Persistent link: https://www.econbiz.de/10014070241