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Kwon, Suehyun - 2016

This paper studies general equilibrium when workers in the economy are also consumers of final goods. Once a firm and a worker are matched, there is a standard moral hazard problem. However, the firm's profit depends on the price of the good the worker produces, and the price is determined by...

Persistent link: https://www.econbiz.de/10011580675

Nitpicky insurers and the law of contracts

Bourgeon, Jean-Marc; Picard, Pierre M. - 2017

that hardly explains the many features of an insurance contract. We extend this setup to include the situation that the … costlessly observable, then it should be included in the contract to improve the risk sharing-incentive trade-off under moral … resulting incompleteness of the contract opens the door to controversies and disputes that may lead to judicial procedures. We …

Persistent link: https://www.econbiz.de/10011723471

Stochastic contracts and subjective evaluations

Lang, Matthias - 2021

Subjective evaluations are widely used, but call for different contracts from traditional moral-hazard settings. Previous literature shows that contracts require payments to third parties, which real-world contracts rarely use. I show that the implicit assumption of deterministic contracts makes...

Persistent link: https://www.econbiz.de/10012697032

Merger efficiency and managerial incentives

Kräkel, Matthias; Müller, Daniel - 2013

We consider a two-stage principal-agent model with limited liability in which a CEO is employed as agent to gather information about suitable merger targets and to manage the merged corporation in case of an acquisition. Our results show that the CEO systematically recommends targets with low...

Persistent link: https://www.econbiz.de/10010198514