We discuss the difficult question of measuring the effects of asymmetric information problems on resource allocation. Three problems are examined: moral hazard, adverse selection, and asymmetric learning. One theoretical conclusion, drawn by many authors, is that information problems may...

Purpose – Moral hazard is a concept that is central to risk and insurance management. It refers to change in economic behavior when individuals are protected or insured against certain risks and losses whose costs are borne by another party. It asserts that the presence of an insurance...

Purpose – The purpose of this paper is to provide a detailed analysis of industry loss warranties (ILWs), an alternative risk transfer instrument which has become increasingly popular throughout the last few years. Design/methodology/approach – The authors first point out key characteristics...

Purpose – The purpose of this paper is to investigate the insurance market in which moral hazard and insurance fraud coexist. In this situation, this research examines the relationship between moral hazard and insurance fraud. Also, this research shows how the amount of policyholder's effort...

Purpose This paper aims to achieve scale, efficiency and mitigate high monitoring costs, and explores the efficacy of micro equity finance at the enterprise level. The study compares the economic features of the proposed framework with interest-based debt finance. Design/methodology/approach...

Purpose – The purpose of this paper is to support the claim that socialism is ineffective and inefficient, and that this insight applies to socialized medicine, as well as all other forms of socialism. Design/methodology/approach – The main method utilized in this paper is the application of...

Purpose – The purpose of this paper is to study the optimal coverage limit in a model of deposit insurance with capital requirements and risk sensitive premia to prevent moral hazard. Design/methodology/approach – The theoretical model has incorporated capital requirements, risk‐sensitive...

This paper examines the contract design problem of microfinance institutions seeking to maximize outreach to the poor while remaining financially sustainable. A dynamic model of group lending is developed that shows how optimal interest rates depend on information regarding moral hazard and...