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On the political economy of financial deregulation
Ertürk, Korkut A. - 2016
taking with mounting social costs. Using simple game theory the paper gives a stylized account of what sustained the …
Persistent link: https://www.econbiz.de/10011435704
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Local agency costs of political centralization
Myerson, Roger B. - In: Theoretical economics : TE ; an open access journal in … 16 (2021) 2, pp. 425-448
We analyze a model of moral hazard in local public services which could be efficiently managed by officials under local democratic accountability, but not by officials who are appointed by the ruler of a centralized autocracy. The ruler might prefer to retain an official who diverted resources...
Persistent link: https://www.econbiz.de/10012587346
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Intrinsic moral hazard
Ertürk, Korkut A. - 2019
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...
Persistent link: https://www.econbiz.de/10011959972
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On the non-contractual nature of donor-recipient interaction in development assistance
Murshed, Syed Mansoob (contributor) - 2008
This paper analyses three issues in strategic donor-recipient interaction motivated by the complexity of the rationale underlying aid. The first is when we have several principals with conflicting objectives. Any one principal cannot offer high powered incentives to the agent to carry out their...
Persistent link: https://www.econbiz.de/10003793485
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On the Political Economy and Limits of Crisis Insurance : The Case of the 2008–11 Bailouts
Congleton, Roger D. - 2011
The bailouts of 2008–10 are the most recent in a long series of in-surance-like policies designed to limit the losses of those harmed by a crisis of some kind — but enacted after a crisis is under way. This paper analyzes the economics and politics of “crisis insurance” programs. The...
Persistent link: https://www.econbiz.de/10013132518
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Natural Disasters, Moral Hazard, and Special Interests in Congress
Kaplan, Ethan - 2019
We exploit the precise timing of domestic natural disasters to study the connection between public attention to politics and legislator support for special interests. Our findings show that when a disaster strikes, the news media reduce both their coverage of politics in general as well as that...
Persistent link: https://www.econbiz.de/10012897042
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Moral Hazard in Electoral Teams
Cox, Gary W. - 2020
How do parties motivate candidates to exert effort in closed-list elections? If each candidate's primary goal is winning a seat, then those in safe and hopeless list positions have weak incentives to campaign. We present a model in which (i) candidates care about both legislative seats and the...
Persistent link: https://www.econbiz.de/10012830995
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Political contributions and the price of credit risk : evidence from credit default swaps
Fang, Shunlan; Hanouna, Paul; Ovtchinnikov, Alexei V.; … - 2017
Firm political contributions are associated with lower credit default swap spreads for contributing firms. To address endogeneity, we employ novel instruments and use a set of exogenous events on campaign contribution restrictions: (a) the passage of the Bipartisan Campaign Reform Act (BCRA)...
Persistent link: https://www.econbiz.de/10011955864
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The Hazards of Agency
Mitnick, Barry M. - 2009
The theory of agency, which has seen many recent applications in the social sciences and management literatures, is … essentially a theory of failures: It seeks to understand the problems created when one party attempts to control another …. Indeed, applications of agency theory have cut across the economics literature and entered the study of many disciplinary …
Persistent link: https://www.econbiz.de/10014207256
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Identification and estimation of dynamic structural models with unobserved choices
Hu, Yingyao; Xin, Yi - 2020
This paper develops identification and estimation methods for dynamic structural models when agents' actions are unobserved by econometricians. We provide conditions under which choice probabilities and latent state transition rules are nonparametrically identified with a continuous state...
Persistent link: https://www.econbiz.de/10012271085