Helping individuals to buy insurance coverage in developing countries, for instance by allowing them to buy insurance on credit, may not necessarily be welfare improving. Using rich administrative data on auto-insurance market in Ghana, and a policy reform that led to sizable reduction in demand...

States have been enacting tort reforms to reduce the liability of physicians conducting malpractice. However, tort reform may create a moral hazard because physicians may take less care due to reduced liability. This paper investigates whether physician moral hazard presents after tort reform. I...

This article analyzes how legal presumptions can mediate between costly litigation and ex ante incentives. We augment a moral hazard model with a redistributional litigation game in which a presumption parameterizes how a court 'weighs' evidence offered by the opposing sides. Strong prodefendant...

In this paper, I study the effects of overconfidence on incentive contracts in a moral-hazard framework in which principal and agent knowingly hold asymmetric beliefs regarding the probability of success of their enterprise. Agent overconfidence can have conflicting effects on the equilibrium...

Existing studies estimate health insurance-induced increases in medical care expenditure by examining medical care decisions that are aggregated to the annual level. Using employer-employee matched data from the Medical Expenditure Panel Survey, I quantify the moral hazard effect of insurance on...

In this paper, I study the effects of overconfidence on incentive contracts in a moral-hazard framework in which principal and agent knowingly hold asymmetric beliefs regarding the probability of success of their enterprise. Agent overconfidence can have conflicting effects on the equilibrium...

We describe a new mechanism that induces accurate forecasts within an organization while reducing moral hazards and the stigma associated with negative opinions. It is based on the notion of identity escrow, whereby the identity of a forecaster is kept anonymous and only revealed when a number...

Double moral hazard arises in the principal-agent model when both parties provide a nonverifiable input following contracting. Balanced-budget contracts are generally second best. If the principal's input is public to two agents, which often characterizes franchising, for example, then...

Technological progress has improved insurers' ability to monitor policyholders and has led to usage-based insurance (UBI) contracts that incorporate behavioral risk factors in pricing. Economic theory predicts that any informative monitoring signal should be adopted in equilibrium (see Shavell,...

A risk-averse consumer purchases an insurance policy; if she suffers a loss, she may receive services from a provider to recover some of the loss. Only the consumer and the provider know if the loss has actually occurred. The provider's behavior is uncertain. With some positive probability, the...