insurance by strictly-risk averse agents and risk-neutral firms when they enjoy limited liability. When exposed to a bankrupting …

performing agent must beat the second best to receive the winner prize. We analyze a tournament with two risk averse agents …

contributions in insurance economics since that time. The review begins with the role of utility, risk, and risk aversion in the …

We analyze optimal hedging contracts and show that although hedging aims at sharing risk, it can lead to more risk …-taking. News implying that a hedge is likely to be loss-making undermines the risk-prevention incentives of the protection seller …. This incentive problem limits the capacity to share risks and generates endogenous counterparty risk. Optimal hedging can …

Derivatives activity, motivated by risk-sharing, can breed risk-taking. Bad news about the risk of the asset underlying … the derivative increases the expected liability of a protection seller and undermines her risk-prevention incentives. This … limits risk-sharing, and may create endogenous counterparty risk and contagion from news about the hedged risk to the balance …

strategies like dual sourcing mitigate the buyer's operational risk, but often do so at the expense of increasing its reputation … risk and sourcing costs. In this paper, we propose a risk-sharing contract for managing the buyer's reputation concerns. We … risk but this has to be balanced against an increase in the operational risk. Risk-sharing also reduces sourcing costs …