According to our traditional conception of agency, most human beings are agents and most, if not all, nonhuman animals are not. However, recent developments in philosophy and psychology have made it clear that we need more than one conception of agency, since human and nonhuman animals are capable of thinking and acting in more than one kind of way. In this paper, I make a distinction between p...

We analyze a dynamic market with a seller who can make a one-time investment that affects the returns of tradable assets. The potential buyers of the assets cannot observe the seller's investment prior to the trade or verify it in any way after the trade. The market faces two types of inefficiency: the ex-ante inefficiency, i.e., the seller's moral hazard problem, and the ex-post inefficiency, ...

We consider a repeated interaction between a manufacturing firm and a subcontractor. The relationship between the two parties is characterized 1) by moral hazard, 2) by the fact that they do not have perfect knowledge about the base cost level of the project which is carried out by a subcontractor (the parties only have identical a priori beliefs). We consider a two-period model where the playe...

This paper adopts a contingent-claim valuation framework to investigate the role of subordinated debt in alleviating the moral hazard problem in banking and providing the regulator with the information on the risk of bank assets. The incorporation of bankruptcy cost in the framework of the analysis provides some new evidence about the potential role of subordinated debt. The extent of market di...

This study addresses how moral judgment development, authenticity, and nonprejudice account for variance in scores pertaining to various motivational functions underlying volunteerism in order to clarify certain problems associated with previous research that has considered such relationships. In the study, 127 participants completed measurements that pertain to these constructs. Correlations r...

This paper proposes a simple continuous time model to analyze capital charges for operational risk. We find that undercapitalized banks have less incentives to reduce their operational risk exposure. We view operational risk charge as a tool to reduce the moral hazard problem. Our results show, that only Advanced Measurement Approach may create appropriate incentives to reduce the frequency of ...

Using a moral hazard model, this study examines the relationship between environmental uncertainty and the adoption of decentralized IT governance. We show that this relationship is determined by a trade-off between the need for processing local information and the concern on moral hazard. The trade-off results in an inverted-U-shaped relationship between environmental uncertainty and decentral...

We consider the problem of when to deliver the contract payoff, in a continuoustime Principal-Agent setting, in the presence of moral hazard and/or adverse selection. The principal can design contracts of a simple form that induce the agent to ask for the payoff at the time of principal’s choosing. The optimal time of payment depends on the agent’s and the principal’s outside options. Examples ...

In 1938 a survey was conducted by the ARBA Committee on Ice Control on the different methods used in the treatment of icy pavements by the several states in the snow belt. Considerable information was obtained, and the findings were reported to the Association. During the past year a follow-up study has been made with the idea of presenting treating methods which could be called standard practi...

This article examines the self-reflexion of Slovenian entrepreneurs to their own business activity, with a focus on their core values and virtues, which would consequently affect the performance, growth and development of entrepreneurship in Slovenia. The article starts with a theoretical understanding of organizational values and moral virtues of entrepreneurs and review of the recent empirica...