This paper analyzes the optimal contract for a consumer to procure a credence good from an expert when (i) the expert might misrepresent his private information about the consumer’s need, (ii) the expert might not choose the requested service since his choice of treatment is non-observable,...

A new approach to moral hazard is presented. Once local incentive compatibil- ity is satis?ed, the problem of verifying global incentive compatibility is shown to be isomorphic to the problem of comparing two classes of distribution functions. Thus, tools from choice under uncertainty can be...

Both borrowers and lenders can be socially responsible (SR). Ethical banks commit to financing only ethical projects, which have social profitability but lower expected revenues than standard projects. Instead, no credible commitment exists for SR borrowers. The matching between SR borrowers and...

The paper argues that financial deregulation incentivized financial firms to take excessive risks and over-expand because it turned social insurance against systemic risk into a common pool (or open) resource. The increased size and complexity of deregulated financial markets in turn raised the...

Insolvency proceedings are strategic for the competitiveness of a national economy. The new law, but also new financial situation of organizations affect the new normal of insolvency framework. In Europe, standards aimed at creating an efficient framework for corporate insolvency resolution are...