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performing agent must beat the second best to receive the winner prize. We analyze a tournament with two risk averse agents …
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negligible of fixed, or farmers are highly risk averse, the moral hazard problem can be eliminated. However, if monitoring costs … depend on monitoring effort and the degree of risk aversion is low, only a second-best solution can be obtained. Numerical … simulations suggest that optimal monitoring effort declines with increasing farmer risk aversion …
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insurance by strictly-risk averse agents and risk-neutral firms when they enjoy limited liability. When exposed to a bankrupting …
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