This paper studies how auditors' risk aversion shapes the audit market and how it interacts with legal liability. The main pillar of the analysis is that the relation between risk aversion and the supplied audit quality is generally non-monotone. Because futile audit costs augment the severity...

This paper systematically studies how performance pay, complementing either baseline feefor-service or capitation, affects physicians' medical service provision and the quality of care. Using a series of controlled experiments with physicians and students, we test the incentive effect of...

Auditors often receive summary information or conclusions from management about account balances or internal controls. They must then gather evidence to assess whether this information is fairly stated. In such situations, management can be considered the first mover and the auditor the second...