Essays on Financial Incentives, Moral Hazard, and Risk-sharing in the Presence of Other-regarding Preferences PDF Download
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Author: Stefan Gregor Neuß
Publisher:
ISBN:
Category :
Languages : en
Pages :
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Author: Stefan Gregor Neuß
Publisher:
ISBN:
Category :
Languages : en
Pages :
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Author: Hideshi Itoh
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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The paper aims at obtaining new theoretical insights into organizational behavior by combining the standard moral hazard models of principal-agent relationships with theories of other-regarding (social or interdependent) preferences, in particular, inequity aversion theory. In the benchmark model, the principal and the agent are both risk neutral, while the agent is wealth constrained and hence the basic tradeoff between incentives and rent extraction arises. I show that other-regarding preferences interact with incentives in nontrivial ways. In particular, the principal is in general worse off as the agent cares more about the well-being of the principal. When there are multiple symmetric agents who care about each other's well-being, the principal can optimally exploit their other-regarding nature by designing an appropriate interdependent contract such as a "fair" team contract or a relative performance contract that creates inequality when their performance outcomes are different. The optimal contract depends on the nature of the agents' other-regarding preferences. The approach taken in this paper can shed light on issues on endogenous preferences within organizations, as suggested by sociologists and organizational economists.
Author: Amy Finkelstein
Publisher: Columbia University Press
ISBN: 0231538685
Category : Medical
Languages : en
Pages : 161
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Addressing the challenge of covering heath care expenses—while minimizing economic risks. Moral hazard—the tendency to change behavior when the cost of that behavior will be borne by others—is a particularly tricky question when considering health care. Kenneth J. Arrow’s seminal 1963 paper on this topic (included in this volume) was one of the first to explore the implication of moral hazard for health care, and Amy Finkelstein—recognized as one of the world’s foremost experts on the topic—here examines this issue in the context of contemporary American health care policy. Drawing on research from both the original RAND Health Insurance Experiment and her own research, including a 2008 Health Insurance Experiment in Oregon, Finkelstein presents compelling evidence that health insurance does indeed affect medical spending and encourages policy solutions that acknowledge and account for this. The volume also features commentaries and insights from other renowned economists, including an introduction by Joseph P. Newhouse that provides context for the discussion, a commentary from Jonathan Gruber that considers provider-side moral hazard, and reflections from Joseph E. Stiglitz and Kenneth J. Arrow. “Reads like a fireside chat among a group of distinguished, articulate health economists.” —Choice
Author: Martin Gaynor
Publisher:
ISBN:
Category : Competition
Languages : en
Pages : 32
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Author: William J. Congdon
Publisher: Brookings Institution Press
ISBN: 0815704984
Category : Business & Economics
Languages : en
Pages : 260
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Argues that public finance--the study of the government's role in economics--should incorporate principles from behavior economics and other branches of psychology.
Author: Manal Fouad
Publisher: International Monetary Fund
ISBN: 1513576569
Category : Business & Economics
Languages : en
Pages : 61
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Book Description
Investment in infrastructure can be a driving force of the economic recovery in the aftermath of the COVID-19 pandemic in the context of shrinking fiscal space. Public-private partnerships (PPP) bring a promise of efficiency when carefully designed and managed, to avoid creating unnecessary fiscal risks. But fiscal illusions prevent an understanding the sources of fiscal risks, which arise in all infrastructure projects, and that in PPPs present specific characteristics that need to be addressed. PPP contracts are also affected by implicit fiscal risks when they are poorly designed, particularly when a government signs a PPP contract for a project with no financial sustainability. This paper reviews the advantages and inconveniences of PPPs, discusses the fiscal illusions affecting them, identifies a diversity of fiscal risks, and presents the essentials of PPP fiscal risk management.
Author: Jiang Luo
Publisher:
ISBN:
Category : Capital budget
Languages : en
Pages : 358
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Author: Alexander W. Cappelen
Publisher:
ISBN: 9781848443259
Category : Economics
Languages : en
Pages : 0
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A growing literature in economics has studied how fairness considerations shape human behavior. This research collection comprises forty key theoretical and empirical contributions spanning the last four decades, along with influential related work in normative economics. These papers show that the fairness motive is essential for understanding human behavior in a wide range of settings, such as markets, bargaining, and redistributive situations. They document large heterogeneity in what people view as fair and the importance people attach to fairness, displaying how a concern for fairness develops in childhood and manifests itself in the brain. Together with an original introduction by the editors, this volume will be a valuable research tool for those interested in the fascinating field of the economics of fairness.
Author: National Academies of Sciences, Engineering, and Medicine
Publisher: National Academies Press
ISBN: 0309452961
Category : Medical
Languages : en
Pages : 583
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Book Description
In the United States, some populations suffer from far greater disparities in health than others. Those disparities are caused not only by fundamental differences in health status across segments of the population, but also because of inequities in factors that impact health status, so-called determinants of health. Only part of an individual's health status depends on his or her behavior and choice; community-wide problems like poverty, unemployment, poor education, inadequate housing, poor public transportation, interpersonal violence, and decaying neighborhoods also contribute to health inequities, as well as the historic and ongoing interplay of structures, policies, and norms that shape lives. When these factors are not optimal in a community, it does not mean they are intractable: such inequities can be mitigated by social policies that can shape health in powerful ways. Communities in Action: Pathways to Health Equity seeks to delineate the causes of and the solutions to health inequities in the United States. This report focuses on what communities can do to promote health equity, what actions are needed by the many and varied stakeholders that are part of communities or support them, as well as the root causes and structural barriers that need to be overcome.
Author: Mr.Stijn Claessens
Publisher: International Monetary Fund
ISBN: 1475561008
Category : Business & Economics
Languages : en
Pages : 66
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This paper reviews the literature on financial crises focusing on three specific aspects. First, what are the main factors explaining financial crises? Since many theories on the sources of financial crises highlight the importance of sharp fluctuations in asset and credit markets, the paper briefly reviews theoretical and empirical studies on developments in these markets around financial crises. Second, what are the major types of financial crises? The paper focuses on the main theoretical and empirical explanations of four types of financial crises—currency crises, sudden stops, debt crises, and banking crises—and presents a survey of the literature that attempts to identify these episodes. Third, what are the real and financial sector implications of crises? The paper briefly reviews the short- and medium-run implications of crises for the real economy and financial sector. It concludes with a summary of the main lessons from the literature and future research directions.
