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Moral Hazard, Risk Aversion And Efficiency

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  • Oliver Gürtler

Abstract

type="main"> This note revisits the classic moral-hazard model, but assumes that the output distribution has moving support and punishments are limited. The results show that the principal can implement an efficient solution if the agent is sufficiently risk averse.

Suggested Citation

  • Oliver Gürtler, 2014. "Moral Hazard, Risk Aversion And Efficiency," Bulletin of Economic Research, Wiley Blackwell, vol. 66(S1), pages 104-109, December.
    • Handle: RePEc:bla:buecrs:v:66:y:2014:i:s1:p:s104-s109
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    References listed on IDEAS

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    1. Schmitz, Patrick W., 2002. "On the Interplay of Hidden Action and Hidden Information in Simple Bilateral Trading Problems," Journal of Economic Theory, Elsevier, vol. 103(2), pages 444-460, April.
    2. Eric Maskin & John Moore, 1999. "Implementation and Renegotiation," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 66(1), pages 39-56.
    3. Mas-Colell, Andreu & Whinston, Michael D. & Green, Jerry R., 1995. "Microeconomic Theory," OUP Catalogue, Oxford University Press, number 9780195102680.
    4. Eric Rasmusen, 1987. "Moral Hazard in Risk-Averse Teams," RAND Journal of Economics, The RAND Corporation, vol. 18(3), pages 428-435, Autumn.
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