منابع مشابه
Warranties as signals under consumer moral hazard.
This article examines the use of prices and warranties as signals of product quality to consumers who choose how to maintain their purchases. The seller's incentives are strongly affected by the interaction of quality and maintenance in determining product reliability. Two different assumptions about this interaction are made. A separating equilibrium in which high quality is signalled with a l...
متن کاملAll-units discounts and double moral hazard
An all-units discount is a price reduction applied to all units purchased if the customer’s total purchases equal or exceed a given quantity threshold. Since the discount is paid on all units rather than marginal units, the tariff is discontinuous and exhibits a negative marginal price (“cliff”) at the threshold that triggers the discount. This paper shows that all-units discounts arise in opti...
متن کاملDouble-Sided Moral Hazard, Efficiency Wages and Litigation
We consider a moral-hazard problem in a principal-agent relationship. Each party can renege on the signed contract since verification of effort is costly and subject to uncertainty. It is shown that ex-post litigation can restore incentives of the agent. Moreover, when the litigation can be settled by the parties the pure threat of using the legal system may suffice to implement the first-best ...
متن کاملSimple Models of Operating Moral Hazard and Investing Moral Hazard
In this paper, we depict and analyze simple models of moral hazard, namely “operating moral hazard” and “investing moral hazard.” First we assume that a corporation exists primarily for the benefit of their shareholders. Then, moral hazard occurs when managers choose an option knowingly that is not optimum for shareholders. We evaluate the loss to shareholders in terms of cash flow to them in t...
متن کاملMoral Hazard and Observability
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ژورنال
عنوان ژورنال: The RAND Journal of Economics
سال: 1985
ISSN: 0741-6261
DOI: 10.2307/2555592