Limited liability and non-responsiveness in agency models
| Autor: | Pires, Henrique Brasiliense de Castro, Moreira, Humberto Ataíde |
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| Přispěvatelé: | Escolas::EPGE |
| Jazyk: | portugalština |
| Rok vydání: | 2019 |
| Předmět: | |
| Zdroj: | Repositório Institucional do FGV (FGV Repositório Digital) Fundação Getulio Vargas (FGV) instacron:FGV |
| Popis: | This paper analyzes the optimal menu of contracts offered by a risk neutral principal to a risk averse agent under moral hazard, adverse selection and limited liability. We show that a limited liability constraint causes pooling of the most efficient agent types. We also find sufficient conditions under which full-pooling is optimal, regardless of agent‘s risk aversion or type distribution. Our model suggests that offering a single contract is often optimal in environments with moral hazard, adverse selection and in which agents face a limited liability constraint. |
| Databáze: | OpenAIRE |
| Externí odkaz: |
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