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Incentive schemes, private information and the double-edged role of competition for agents

Bannier, Christina E.; Feess, Eberhard; Packham, Natalie; … - 2016

This paper examines the effect of imperfect labor market competition on the efficiency of compensation schemes in a setting with moral hazard and risk-averse agents, who have private information on their productivity. Two vertically differentiated firms compete for agents by offering contracts...

Persistent link: https://www.econbiz.de/10011498942

Screening teams of moral and altruistic agents

Sarkisian, Roberto - In: Games 12 (2021) 4, pp. 1-11

This paper studies the problem of screening teams of either moral or altruistic agents, in a setting where agents …

Persistent link: https://www.econbiz.de/10012649710

Coordinated Strategic Defaults and Financial Fragility in a Costly State Veri fication Model

Carrasco, Vinicius - 2015

Diversification through a financial intermediary has the benefit of transforming loans that need costly monitoring into bank deposits that do not. We show, however, that financial intermediation in a costly state verification model has a cost not yet analyzed: it allows for the existence of...

Persistent link: https://www.econbiz.de/10013017966

Prominent numbers, indices and ratios in exchange rate determination and financial crashes : in Economists' models, in the field and in the laboratory

Pope, Robin; Selten, Reinhard; Kube, Sebastian; Hagen, … - 2009

laboratory. Third, nominalist heuristics are incompatible with expected utility theory which excludes the evaluation stage, and … are also incompatible with prospect theory which assumes that, while the evaluation stage can involve systematic mistakes … model and identify what is a mistake, and b) decision makers can maximise. However, contrary to prospect theory, in the …

Persistent link: https://www.econbiz.de/10003867227

Collateralization, Leverage, and Stressed Expected Loss

Jondeau, Eric - 2017

We describe a general equilibrium model with a banking system in which the deposit bank collects deposits from households and the merchant bank provides funds to firms. The merchant bank borrows collateralized short-term funds from the deposit bank. In an economic downturn, as the value of...

Persistent link: https://www.econbiz.de/10012970896

On existence of private unemployment insurance with advance information on future job losses

Denderski, Piotr; Stoltenberg, Christian - 2021

We study the existence of a profitable unemployment insurance market in a dynamic economy with adverse selection rooting in information on future job losses. The new feature of the model is that the insurer and workers interact repeatedly. Repeated interactions make it possible to threaten...

Persistent link: https://www.econbiz.de/10012545133

Optimal incentives without expected utility

Gonzalez Jimenez, Victor H. - 2022

This paper investigates the optimal design of incentives when agents distort probabilities. We show that the type of probability distortion displayed by the agent and its degree determine whether an incentivecompatible contract can be implemented, the strength of the incentives included in the...

Persistent link: https://www.econbiz.de/10013460007

How Effectively Can Debt Covenants Alleviate Financial Agency Problems?

Gamba, Andrea - 2019

We examine the effectiveness of debt covenants in alleviating financial agency problems. Distortions in both investment and financing policies with long--term debt are captured in a structural dynamic model where both policies are endogenously determined by shareholders. The combined and...

Persistent link: https://www.econbiz.de/10012905601

Bankruptcy : Is it Enough to Forgive or Must We Also Forget?

Elul, Ronel - 2012

In many countries, lenders are restricted in their access to information about borrowers' past defaults. The authors study this provision in a model of repeated borrowing and lending with moral hazard and adverse selection. They analyze its effects on borrowers' incentives and access to credit,...

Persistent link: https://www.econbiz.de/10013114975

Bankruptcy : Is it Enough to Forgive or Must We Also Forget?

Elul, Ronel - 2019

In many countries, lenders are not permitted to use information about past defaults after a specified period of time has elapsed. We model this provision and determine conditions under which it is optimal. We develop a model in which entrepreneurs must repeatedly seek external funds to finance a...

Persistent link: https://www.econbiz.de/10012706150