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Guiso, Luigi - 2001

Persistent link: https://www.econbiz.de/10013439271

Mitigating Moral Hazard With Usage-Based Insurance

Holzapfel, Julia; Peter, Richard; Richter, Andreas - 2023

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,...

Persistent link: https://www.econbiz.de/10014254954

Screening with Securities

Inostroza, Nicolas; Figueroa, Nicolás - 2023

A liquidity-constrained asset owner designs an asset-backed security to raise funds from an informed liquidity supplier. Information insensitive securities reduce the liquidity supplier's informational rents. The issuer optimally screens the liquidity supplier's private information by offering a...

Persistent link: https://www.econbiz.de/10014255105

Incentive Contracts under Product Market Competition and R&D Spillovers

Chalioti, Evangelia - 2023

This paper studies cost-reducing R&D incentives in a principal-agent model with product market competition. It argues that moral hazard does not necessarily decrease firms’ profits in this setting. In highly competitive industries, firms are driven by business-stealing incentives and exert...

Persistent link: https://www.econbiz.de/10014255776

Heterogeneous Agents’ Financial Decisions and Asset Accumulation

Lee, Hangsuck; Ryu, Doojin; Son, Jihoon - 2023

This study develops a life-cycle model to predict an overlapping generations economy comprising heterogeneous agents. In the proposed model, ex-ante heterogeneity involves the work probability, survival rate, subjective discount rate, and intertemporal elasticity of substitution. We observe...

Persistent link: https://www.econbiz.de/10014255822

It's Time We Put Agency into Behavioural Public Policy

Banerjee, Sanchayan; Grüne-Yanoff, Till; John, Peter; … - 2023

Promoting agency – people’s ability to form intentions and to act on them freely – must become a primary objective for behavioural public policy (BPP). Contemporary BPPs do not pursue this objective, which is problematic for many reasons. From an ethical perspective, goals like personal...

Persistent link: https://www.econbiz.de/10014255858

What Participative Budgeting Experiments Reveal about Agency Theory : Responsibility, Transparency, and Accountability

Abdel-Rahim, Heba; Liu, Jing; Stevens, Douglas E. - 2022

responsibility, transparency, and accountability. We define these accounting constructs and present two experiments designed to … more honestly in the absence of transparency and accountability as captured by an information system and face …-to-face budget reporting. We also show that transparency and accountability increase reporting honesty independently and …

Persistent link: https://www.econbiz.de/10014256391

A Dual Approach to Agency Problems

Chi, Chang Koo; Choi, Kyoung Jin - 2023

This paper presents a dual approach to the standard agency model. We formulate the dual of the principal-agent problem under the assumption that the incentive constraint can be replaced by a local constraint (the first-order approach), to examine whether the relaxed agency problem yields a...

Persistent link: https://www.econbiz.de/10014256629

Capitalists or Fiduciary Conscious Agents? ESG Mutual Fund Fees and Investor Sophistication

Wei, Wei; Zalewska, Anna (Ania) - 2023

Gil–Bazo and Ruiz–Verdú (2009) show that fund families strategically exploit the low performance sensitivity of investors, i.e., investors’ low elasticity of demand with respect to performance, to increase fund fees. Given that environmentally, socially and governance (ESG) focused...

Persistent link: https://www.econbiz.de/10014256676

Optimal Investment Under High-Water Mark Contracts with Model Ambiguity

Wang, Ying; Wu, Weixing; huang, wenli; Liu, Wenqiong - 2023

This paper incorporates model ambiguity into the traditional hedge fund models to explore how ambiguity influences the manager's investment strategy, risk attitude and compensation structure. We find the manager is ambiguity aversion. Model ambiguity enhances her level of endogenous risk...

Persistent link: https://www.econbiz.de/10014257026