We explore the role played by libel laws in selecting the information delivered by mass media to voters. The focus is on whether such laws can reduce political corruption and increase voters’ welfare. By endogenizing the response of the voters to information from the media, we clarify under which circumstances regulation reduces or increases corruption. The analysis shows that libel laws can re...

Morality is a source of reasons for action, what philosophers call practical reasons. Kantians say that it ‘gives’ reasons to everyone. We can even think of moral requirements as amounting to particularly strong or stringent reasons, in an effort to demystify deontological views like Kant’s, with its insistence on inescapable or ‘binding’ moral requirements or ‘oughts.’1 When we say that someon...

This paper studies a continuous-time principal-agent problem in which a principal hires an agent to do a multi-stage R&D project. The agent’s effort is unobservable and the transition from one stage to the next is modeled by a jump process with a constant Poisson arrival rate. We characterize the optimal dynamic contract that solves the repeated moral-hazard problem. In it, the agent’s payment ...

Moral relativism is an attractive position, but also one that it is difficult to formulate. In this paper, we propose an alternative way of formulating moral relativism that locates the relativity of morality in the property that makes moral claims true. Such an approach, we believe, has significant advantages over other possible ways of formulating moral relativism. We conclude by considering ...

This paper analyses the role of asymmetric information and moral hazard on IPO underpricing and lockups. I document that high information asymmetry is related to underpricing while the lockup length and lockup expiration return is related to moral hazard. Accordingly, lockup length and underpricing work as substitute signals. These results relate to the UK’s unique institutional settings: long ...

We provide an equilibrium asset pricing formula under moral hazard on the assumption of a power utility function and an endogenous riskless rate. Moral hazard is defined here as a firm’s change of measure that is incontractible. We show explicitly in closed form that moral hazard distorts asset prices by (1) moving the market price of diffusive risk in the opposite direction to an investor’s ma...

This paper analyzes regulatory design for agroecosystem management on public rangelands. We present an informational and institutional environment where three of the most prominent regulatory instruments on public rangelands – input regulation, cost-sharing/taxation, and performance regulation – can be defined and compared. The paper examines how the optimal regulation is shaped by the informat...

This paper introduces moral hazard into a standard general equilibrium model with heterogeneous …rms, to study the impact of trade liberalization on wage inequality between identical workers. I show that trade liberalization operates on two margins of inequality, generating betweenand within-…rm wage dispersion. While the former channel has been studied in recent papers, the latter is novel in ...

We develop a theoretical framework to study illicit drugs markets, and we estimate it using data on drug purchases. Buyers are searching for high-quality drugs, but they can determine drugs’ quality (i.e., their purity) only after consuming them. Hence, sellers can rip-off first-time buyers, or can offer higher-quality drugs to induce buyers to purchase again from them. In equilibrium, a distri...

The occurrence of the September 28, 2004 Mw=6.0 mainshock at Parkfield, California, has significantly increased the mean and aperiodicity of the series of time intervals between mainshocks in this segment of the San Andreas fault. We use five different statistical distributions as renewal models to fit this new series and to estimate the time-dependent probability of the next Parkfield mainshoc...