We examine whether the economy can be insured against banking crises with deposit and loan contracts contingent on macroeconomic shocks. We study banking competition and show that the private sector insures the banking system through such contracts, and banking crises are avoided, provided that...

In the aftermath of a financial crisis, policymakers often must determine how best to trade off future security from a similar crisis and future moral hazard. The more the government pledges to protect the value of the assets of financial institutions in a crisis, the greater the risks that...

Crowdfunding challenges the traditional separation between finance and marketing. It creates economic value by reducing demand uncertainty, which enables a better screening of positive NPV projects. Entrepreneurial moral hazard threatens this effect. Using mechanism design, mechanisms are...