Moral Hazard and Bargaining Over Incentive Contracts PDF Download
Are you looking for read ebook online? Search for your book and save it on your Kindle device, PC, phones or tablets. Download Moral Hazard and Bargaining Over Incentive Contracts PDF full book. Access full book title Moral Hazard and Bargaining Over Incentive Contracts by Marcus Dittrich. Download full books in PDF and EPUB format.
Author: Marcus Dittrich
Publisher:
ISBN:
Category :
Languages : en
Pages : 20
Get Book Here
Book Description
Author: Marcus Dittrich
Publisher:
ISBN:
Category :
Languages : en
Pages : 20
Get Book Here
Book Description
Author: Anja Schöttner
Publisher:
ISBN:
Category :
Languages : en
Pages : 190
Get Book Here
Book Description
Author: Bappaditya Mukhopadhyay
Publisher:
ISBN:
Category :
Languages : en
Pages : 21
Get Book Here
Book Description
In this paper, we address the issue of possible moral hazard that rating agencies might have. We discuss the feasibility of possible incentive contracts that can ameliorate this problem. We find, that incentive payments to the rating agency based on expected returns on debt will do away with the moral hazard problem.
Author: Gregory Lewis
Publisher:
ISBN:
Category :
Languages : en
Pages :
Get Book Here
Book Description
Author: Florian Englmaier
Publisher:
ISBN:
Category : Contracts
Languages : en
Pages : 0
Get Book Here
Book Description
Author: Nabil I. Al-Najjar
Publisher:
ISBN:
Category : Business ethics
Languages : en
Pages : 23
Get Book Here
Book Description
Author: John Evans
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
Get Book Here
Book Description
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: Robert Puelz
Publisher:
ISBN:
Category :
Languages : en
Pages :
Get Book Here
Book Description
Predictions concerning structure and performance for managerial incentive contracts designed to prevent accidents are developed and tested. The model predicts a step-function penalty with more costly, more reliable audits used for higher loss reports to control ex post exaggeration of the loss. In addition, the penalty induces nonreporting that is imperfectly controlled through random audits. An empirical contract implemented to control workers' compensation medical losses provides evidence consistent with these predictions. The contract reduces both accident frequency and total losses, but increases reported loss severity as managers evade approximately 40 percent of the accident penalty by underreporting small losses.
Author: Rohan Pitchford
Publisher:
ISBN:
Category :
Languages : en
Pages : 18
Get Book Here
Book Description
Author: Espen R. Moen
Publisher:
ISBN:
Category :
Languages : en
Pages : 42
Get Book Here
Book Description
We analyze the interaction between intertemporal incentive contracts and search frictions associated with on-the-job search. In our model, agency problems call for wage contracts with deferred compensation. At the same time workers do on-the-job search. Deferred compensation improves workers' incentives to exert effort but distorts their on-the-job search decisions. We show that deferred compensation is less attractive when the value to the worker-firm pair of on-the-job search is high . Moreover, the interplay between search frictions and wage contracts creates feedback effects. If firms in equilibrium use contracts with deferred compensation, fewer firms with vacancies enter the on-the-job search market, and this in turn reduces the distortions created by deferred compensation. These feedback effects between the incentive contracts used and the activity level in the search markets may lead to multiple equilibria: a low-turnover equilibrium where firms use deferred compensation, and a high-turnover equilibrium where they do not. Furthermore, the model predicts that firms are more likely to use deferred compensation when search frictions are high and when the gains from on-the-job search are small.
