1 " Since perhaps the only meaningful distinction between man and machine is moral hazard, it may be too much to ask that banking reform eliminate all self-interested ... behavior. However, the mere recognition of the possibility of self-interest ... is a useful start. " 2

TESTING FOR MORAL HAZARD IN REINSURANCE MARKETS Zhiqiang Yan ABSTRACT This paper tests for the existence of residual moral hazard in the three largest reinsurance markets in the United States for the period 1995-2000, and finds that (1) residual moral hazard does not exist in private passenger auto liability, product liability and overall reinsurance markets; (2) residual moral hazard might exi...

This paper critically evaluates a recently introduced theory of the demand for health insurance. The new model makes a valuable contribution to the theoretical literature on moral hazard and the debate over national health insurance, but as a general explanation of the demand for health insurance it fails to provide a robust alternative to conventional theory. [

This paper is an empirical study of the market for managers, more speci…cally the e¤ects of agency, human capital, and preferences on their promotion, tenure, turnover and compensation. From a large longitudinal data set compiled from observations on executives and their publicly listed …rms, we construct a career hierarchy and report on its main features. Our summary results motivate a dynamic...

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 ...