Essays on Incentive Contracts Under Moral Hazard and Non-verifiable Performance PDF Download
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Author: Anja Schöttner
Publisher:
ISBN:
Category :
Languages : en
Pages : 190
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Author: Anja Schöttner
Publisher:
ISBN:
Category :
Languages : en
Pages : 190
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Author: Florian Englmaier
Publisher:
ISBN:
Category :
Languages : en
Pages : 50
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Author: Nicole Petrick
Publisher: GRIN Verlag
ISBN: 3640394127
Category : Business & Economics
Languages : de
Pages : 25
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Essay aus dem Jahr 2005 im Fachbereich BWL - Recht, Note: 1,7, Higher School of Economics Moscow, Russia, Sprache: Deutsch, Abstract: Legal and economical interpretations of contract, contract law and contract theory, asymmetric information, adverse selection and moral hazard. Paper explains negative effects of adverse selection and moral hazard for the case of transaction costs and incomplete contracts and describes incentives to avoid adverse selection and moral hazard, such as signaling and deductibles as well as indemnity contracts and valued contracts.
Author: Filipe Balmaceda
Publisher:
ISBN:
Category : Incentives in industry
Languages : en
Pages : 258
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Author: Nadja Vanessa Kairies-Schwarz
Publisher:
ISBN:
Category :
Languages : en
Pages :
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Author: John Evans
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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To address agents' moral hazard over effort, incentive contracts impose risk on the agents. As performance measures become noisier, the conventional agency analysis predicts that principals will reduce the incentive weights assigned to such measures. However, prior empirical results (Prendergast 2002) frequently find the opposite, i.e., incentive weights are larger (agents bear more risk) in more uncertain environments. This paper provides new evidence on the association between the extent of uncertainty and the level of risk imposed on agents. In the context of contracts between managed care organizations and physicians, we examine the effect of task characteristics and the legal liability environment on the extent of risk that physicians bear. We derive the optimal weighting of multiple performance measures in a model of a physician's choice of revenue-generating and cost control efforts. The model predicts that physicians who face less task uncertainty bear more cost risk in their contracts, as predicted by the conventional moral hazard model. Likewise, the model predicts that as the association between task uncertainty and legal liability uncertainty becomes stronger, physicians bear less cost risk in their contracts. Our empirical results generally support these predictions. We offer an explanation for why these results tend to be consistent with the conventional moral hazard analysis, contrary to empirical results in a number of previous studies.
Author: Jacques Paul Lawarrée
Publisher:
ISBN:
Category :
Languages : en
Pages : 418
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Author: Gregory Lewis
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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Deadlines and penalties are widely used to incentivize effort. We model how these incentive contracts affect the work rate and time taken in a procurement setting, characterizing the efficient contract design. Using new micro-level data on Minnesota highway construction contracts that includes day-by-day information on work plans, hours actually worked and delays, we find evidence of moral hazard. As an application, we build an econometric model that endogenizes the work rate, and simulate how different incentive structures affect outcomes and the variance of contractor payments. Accounting for the traffic delays caused by construction, switching to a more efficient design would substantially increase welfare without substantially increasing the risk borne by contractors.
Author: Edward B. Roberts
Publisher: Forgotten Books
ISBN: 9780666180346
Category : Reference
Languages : en
Pages : 48
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Excerpt from Effects of Incentive Contracts in Research and Development: A Preliminary Research Report In the past several years an effort has originated in the Defense Department (and followed by other government agencies) to discourage the use of cost-p1us=fixed fee (cpff) contracts and substitute contractual incentive arrangements. This effort supposedly relies upon the profit motive to reduce requirements for direct government control and to stim ulate better contractor performance and cost estimating. Incentive type contracts are not new in government contracting. Production contracts have been awarded on a fixed price basis for many years. The fixed price contract provides maximum correlation of contract profits with contract cost, and in theory might offer maximum cost incentive. How ever the use of incentive arrangements on r&d contracts is the novel feature of the dod (and nasa) programs of the past several years. About the Publisher Forgotten Books publishes hundreds of thousands of rare and classic books. Find more at www.forgottenbooks.com This book is a reproduction of an important historical work. Forgotten Books uses state-of-the-art technology to digitally reconstruct the work, preserving the original format whilst repairing imperfections present in the aged copy. In rare cases, an imperfection in the original, such as a blemish or missing page, may be replicated in our edition. We do, however, repair the vast majority of imperfections successfully; any imperfections that remain are intentionally left to preserve the state of such historical works.
Author: Bernard Sinclair-Desgagne
Publisher:
ISBN:
Category :
Languages : en
Pages : 30
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This paper seeks to characterize incentive compensation in a static principal-agent moral hazard setting in which both the principal and the agent are prudent (or downside risk averse). We show that optimal incentive pay should then be `approximately concave' in performance, the approximation being closer the more downside risk averse the principal is compared to the agent. Limiting the agent's liability would improve the approximation, but taxing the principal would make it coarser. The notion of an approximately concave function we introduce here to describe optimal contracts is relatively recent in mathematics; it is intuitive and translates into concrete empirical implications, notably for the composition of incentive pay packages. We also clarify which measure of prudence - among the various ones proposed in the literature - is relevant to investigate the tradeoff between downside risk sharing and incentives.
