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This paper proposes a simple analysis for examining an agent's optimal decisions in a principal-agency problem. Unlike the standard approach, the target firm's expected return and risk are modeled as a parametric curve in terms of a critical business decision. A general condition is derived for...
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changes in physician behavior and patient outcomes. We find that physicians respond to lawsuits by practicing more …, they respond similarly to winning and losing cases. Second, physicians' reactions to a patient's death vary depending on …This paper investigates how physicians adjust their clinical decision-making following medical malpractice lawsuits and …
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Risk classification refers to the use of observable characteristics by insurers to group individuals with similar expected claims, compute the corresponding premiums, and thereby reduce asymmetric information. Risk classification can be used to mitigate adverse selection and improve insurance...
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needs of clients. Consequently, the agency theory (principal-agent dependency) commonly used in modern times is being …
Persistent link: https://www.econbiz.de/10013489498
Several empirical findings have challenged the traditional trade-off between risk and incentives. By combining risk aversion and limited liability in a standard principal-agent model the empirical puzzle on the positive relationship between risk and incentives can be explained.
Persistent link: https://www.econbiz.de/10010383029
One of the standard predictions of the agency theory is that more incentives can be given to agents with lower risk …
Persistent link: https://www.econbiz.de/10011848346
workers' environments and incentive pay. The authors employ Prendergast's (2002) theory that incorporates the delegation of …
Persistent link: https://www.econbiz.de/10013137206