The paper reports the results of two experiments in which people who first made an immoral choice were then more likely to donate to charity than those who did not. In addition, those who knew that a donation opportunity would follow the potential moral transgression were more likely to behave immorally than those who were not told of the donation option. We interpret this increase in charitabl...

Uncertainty has qualitatively different implications than risk in studying executive incentives. We study the interplay between profitability uncertainty and moral hazard, where profitability is multiplicative with managerial effort. Investors who face greater uncertainty desire faster learning, and consequently offer higher managerial incentives to induce higher effort from the manager. In con...

This paper uses unique data and augments existing theory focussing on bank’s lending to new ventures. We are primarily concerned with banks’ use of collateral and interest margins in terms of reducing adverse selection and moral hazard problems. We find a trade-off between interest margins and collateral per unit borrowed. Margins are insensitive to the magnitude of collateral per unit of borro...

The Controllability Principle in Responsibility Accounting: Another Look In this paper, we illustrate some subtleties in responsibility accounting by studying settings in which there is an interplay between different control problems. In a setting in which agents are involved in both team and individual production, we provide conditions under which the agents are not held responsible for the te...

Th is paper defends a qualifi ed version of moral vegetarianism. It defends a weak thesis and, more tentatively, a strong thesis, both from a very broad basis that assumes neither that animals have rights nor that they are entitled to equal consideration. Th e essay’s only assumption about moral status, an assumption defended in the analysis of the wrongness of cruelty to animals, is that senti...

This paper investigates the relationship between firm value and board composition with consideration of the effects of D&O insurance: monitoring incentive and moral hazard. Based on three measurements of firm value, we find that (1) D&O insurance provides monitoring incentive for the board; (2) firm value is significantly related to board composition and D&O insurance; and (3) the function of D...

a r t i c l e i n f o a b s t r a c t Does the unification of retail and investment banking necessarily heighten risk in financial markets? Using a simple two period intertemporal model with borrower's moral hazard and uninsured risk, we argue that the integration in financial service markets under universal banking could give rise to a greater risk sharing arrangement. This could eliminate the...

This paper presents a principal-agent model in which the agent has imprecise beliefs. We model this situation formally by assuming the agent’s preferences are incomplete as in Bewley (1986) [2]. In this setting, incentives must be robust to Knightian uncertainty. We study the implications of robustness for the form of the resulting optimal contracts. We give conditions under which there is a un...