This file is part of IDEAS, which uses RePEc data


[ Papers | Articles | Software | Books | Chapters | Authors | Institutions | JEL Classification | NEP reports | Search | New papers by email | Author registration | Rankings | Volunteers | FAQ | Blog | Help! ]

Moral Hazard and Nonexclusive Contracts

Author info | Abstract | Publisher info | Download info | Related research | Statistics
Author Info
Alberto Bisin () (New York University)
Danilo Guaitoli () (Universitat Autónoma de Barcelona)

Additional information is available for the following registered author(s):

Abstract

We study equilibria for economies with hidden action in environments in which the agents' contractual relationships with competing financial intermediaries cannot be monitored (or are not contractible upon). We fully characterize equilibrium allocations and contracts for such economies, as well as discuss their welfare properties. Depending on the parameters of the economy, either the optimal action choice is not sustained in equilibrium or, if it is, agents necessarily enter into multiple contractual relationships and intermediaries make positive profits, even under free-entry conditions. The main features and implications of these environments are consistent with several stylized facts of markets for unsecured loans.

Download Info
To our knowledge, this item is not available for download. To find whether it is available, there are three options:
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.

Publisher Info
Article provided by The RAND Corporation in its journal RAND Journal of Economics.

Volume (Year): 35 (2004)
Issue (Month): 2 (Summer)
Pages: 306-328
Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Handle: RePEc:rje:randje:v:35:y:2004:2:p:306-328

Contact details of provider:
Web page: http://www.rje.org

Order Information:
Web: http://gemini.econ.umd.edu/cgi-bin/rje_online.cgi

For technical questions regarding this item, or to correct its listing, contact: ().

Related research
Keywords:

Other versions of this item:

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Laurence J. Kotlikoff & Avia Spivak, 1979. "The Family as an Incomplete Annuities Market," NBER Working Papers 0362, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  2. Hoff, Karla & Stiglitz, Joseph E., 1997. "Moneylenders and bankers: price-increasing subsidies in a monopolistically competitive market," Journal of Development Economics, Elsevier, vol. 52(2), pages 429-462, April. [Downloadable!] (restricted)
    Other versions:
  3. Bisin, Alberto & Gottardi, Piero, 1999. "Competitive Equilibria with Asymmetric Information," Journal of Economic Theory, Elsevier, vol. 87(1), pages 1-48, July. [Downloadable!] (restricted)
    Other versions:
  4. Bernheim, B Douglas & Whinston, Michael D, 1986. "Common Agency," Econometrica, Econometric Society, vol. 54(4), pages 923-42, July. [Downloadable!] (restricted)
  5. Richard Arnott & Joseph Stiglitz, 1991. "The Welfare Economics of Moral Hazard," NBER Working Papers 3316, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  6. Simon, Leo K & Zame, William R, 1990. "Discontinuous Games and Endogenous Sharing Rules," Econometrica, Econometric Society, vol. 58(4), pages 861-72, July. [Downloadable!] (restricted)
    Other versions:
  7. Helpman, Elhanan & Laffont, Jean-Jacques, 1975. "On moral hazard in general equilibrium theory," Journal of Economic Theory, Elsevier, vol. 10(1), pages 8-23, February. [Downloadable!] (restricted)
  8. J. A. Mirrlees & P. Diamond, 1982. "Social Insurance with Variable Retirement and Private Saving," Working papers 296, Massachusetts Institute of Technology (MIT), Department of Economics.
  9. Bisin, A. & Gottardi, P., 1997. "General Competitive Analysis with Asymmetric Information," DELTA Working Papers 97-26, DELTA (Ecole normale supérieure).
    Other versions:
  10. Greenwood, Jeremy & Jovanovic, Boyan, 1990. "Financial Development, Growth, and the Distribution of Income," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages 1076-1107, October. [Downloadable!] (restricted)
    Other versions:
  11. Aleem, Irfan, 1990. "Imperfect Information, Screening, and the Costs of Informal Lending: A Study of a Rural Credit Market in Pakistan," World Bank Economic Review, Oxford University Press, vol. 4(3), pages 329-49, September.
  12. Atkeson, Andrew & Lucas, Robert E, Jr, 1992. "On Efficient Distribution with Private Information," Review of Economic Studies, Blackwell Publishing, vol. 59(3), pages 427-53, July. [Downloadable!] (restricted)
  13. Ma, Ching-To, 1988. "Unique Implementation of Incentive Contracts with Many Agents," Review of Economic Studies, Blackwell Publishing, vol. 55(4), pages 555-72, October. [Downloadable!] (restricted)
  14. Bizer, David S & DeMarzo, Peter M, 1992. "Sequential Banking," Journal of Political Economy, University of Chicago Press, vol. 100(1), pages 41-61, February. [Downloadable!] (restricted)
  15. Guiso, Luigi & Jappelli, Tullio & Terlizzese, Daniele, 1991. "Why is Italy's Savings Rate So High?," CEPR Discussion Papers 572, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
    Other versions:
  16. Petersen, Mitchell A & Rajan, Raghuram G, 1994. " The Benefits of Lending Relationships: Evidence from Small Business Data," Journal of Finance, American Finance Association, vol. 49(1), pages 3-37, March. [Downloadable!] (restricted)
  17. Jaynes, Gerald David, 1978. "Equilibria in monopolistically competitive insurance markets," Journal of Economic Theory, Elsevier, vol. 19(2), pages 394-422, December. [Downloadable!] (restricted)
  18. Bencivenga, Valerie R & Smith, Bruce D, 1991. "Financial Intermediation and Endogenous Growth," Review of Economic Studies, Blackwell Publishing, vol. 58(2), pages 195-209, April. [Downloadable!] (restricted)
    Other versions:
  19. Oliver Hart & Bengt Holmstrom, 1986. "The Theory of Contracts," Working papers 418, Massachusetts Institute of Technology (MIT), Department of Economics.
  20. Prescott, Edward C & Townsend, Robert M, 1984. "Pareto Optima and Competitive Equilibria with Adverse Selection and Moral Hazard," Econometrica, Econometric Society, vol. 52(1), pages 21-45, January. [Downloadable!] (restricted)
  21. Charles M. Kahn & Dilip Mookherjee, 1996. "Competition and Incentives with Non-Exclusive Contracts," Papers 0075, Boston University - Industry Studies Programme.
    Other versions:
  22. Al-Najjar, Nabil Ibraheem, 1995. "Decomposition and Characterization of Risk with a Continuum of Random Variables," Econometrica, Econometric Society, vol. 63(5), pages 1195-1224, September. [Downloadable!] (restricted)
  23. Smith, Clifford Jr. & Warner, Jerold B., 1979. "On financial contracting : An analysis of bond covenants," Journal of Financial Economics, Elsevier, vol. 7(2), pages 117-161, June. [Downloadable!] (restricted)
  24. Robert Gibbons, 1997. "Incentives and Careers in Organizations," NBER Working Papers 5705, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  25. Siamwalla, Ammar, et al, 1990. "The Thai Rural Credit System: Public Subsidies, Private Information, and Segmented Markets," World Bank Economic Review, Oxford University Press, vol. 4(3), pages 271-95, September.
  26. Richard Arnott & Joseph Stiglitz, 1991. "Equilibrium in Competitive Insurance Markets with Moral Hazard," NBER Working Papers 3588, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  27. Bisin, Alberto, 1998. "General Equilibrium with Endogenously Incomplete Financial Markets," Journal of Economic Theory, Elsevier, vol. 82(1), pages 19-45, September. [Downloadable!] (restricted)
Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Heski Bar-Isaac & Vicente Cuñat, 2005. "Long Term Debt with Hidden Borrowing," Economics Working Papers 803, Department of Economics and Business, Universitat Pompeu Fabra. [Downloadable!]
    Other versions:
  2. Yaron Leitner, 2005. "A theory of an intermediary with nonexclusive contracting," Working Papers 05-12, Federal Reserve Bank of Philadelphia. [Downloadable!]
  3. Andrea Attar & Arnold Chassagnon, 2006. "On moral hazard and nonexclusive contracts," PSE Working Papers 2006-51, PSE (Ecole normale supérieure). [Downloadable!]
  4. Tano Santos & Jose A. Scheinkman, 2001. "Financial Intermediation without Exclusivity," American Economic Review, American Economic Association, vol. 91(2), pages 436-439, May. [Downloadable!] (restricted)
  5. Reich, S., 2007. "Robust Incentives," Cambridge Working Papers in Economics 0729, Faculty of Economics, University of Cambridge. [Downloadable!]
  6. Piero Gottardi & Alberto Bisin & Adriano Rampini, 2007. "Managerial Hedging and Portfolio Monitoring," Working Papers 2007_24, University of Venice "Ca' Foscari", Department of Economics. [Downloadable!]
    Other versions:
  7. Andrea, ATTAR & Eloisa, CAMPIONI & Gwena‘l, PIASER, 2005. "Multiple Lending and Constrained Efficiency in the Credit Market," Discussion Papers (ECON - Département des Sciences Economiques) 2005024, Université catholique de Louvain, Département des Sciences Economiques. [Downloadable!]
    Other versions:
  8. Yaron Leitner, 2009. "Inducing agents to report hidden trades: a theory of an intermediary," Working Papers 09-10, Federal Reserve Bank of Philadelphia. [Downloadable!]
  9. OZERTURK, Saltuk, 2006. "Hedge markets for executives and corporate agency," CORE Discussion Papers 2006009, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE). [Downloadable!]
  10. Matthias Blonski & Ulf von Lilienfeld-Toal, 2008. "Excess Returns and the Distinguished Player Paradox," cege – Center for European, Governance and Economic Development Research Discussion Papers 78, cege – Center for European, Governance and Economic Development Research, University of Goettingen (Germany)., revised 27 Oct 2008. [Downloadable!]
  11. T. Santos & J. Scheinkman, 2000. "Competition Among Exchanges," Princeton Economic Theory Papers 00s12, Economics Department, Princeton University.
    Other versions:
  12. Andrea Attar & Thomas Mariotti & Francois Salanie, 2009. "Non-Exclusive Competition in the Market for Lemons," Working Papers 09.13.289, LERNA, University of Toulouse. [Downloadable!]
    Other versions:
  13. Alberto Bennardo & Pierre-Andre Chiappori, 2003. "Bertrand and Walras Equilibria Under Moral Hazard," Levine's Working Paper Archive 618897000000000748, David K. Levine. [Downloadable!]
    Other versions:
  14. repec:bep:thecon:v:6:y:2006:i:1:p:1253-1253 is not listed on IDEAS
    Other versions:
  15. Gwenael Piaser, 2005. "Stochastic and deterministic menus in common agency games," Economics Bulletin, Economics Bulletin, vol. 4(11), pages 1-6. [Downloadable!]
  16. Alberto Bennardo & Marco Pagano & Salvatore Piccolo, 2008. "Multiple-Bank Lending, Creditor Rights and Information Sharing," CSEF Working Papers 211, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy. [Downloadable!]
    Other versions:
  17. Andrea Attar & Nicolas Porteiro & Gwenaël Piaser, 2006. "A note on Common Agency models of moral hazard," Working Papers 2006_36, University of Venice "Ca' Foscari", Department of Economics. [Downloadable!]
    Other versions:
  18. Mikhail Golosov & Aleh Tsyvinski, 2006. "Optimal Taxation with Endogenous Insurance Markets," Levine's Bibliography 784828000000000445, UCLA Department of Economics. [Downloadable!]
    Other versions:
  19. repec:bep:thetop:v:7:y:2007:i:1:p:1358-1358 is not listed on IDEAS
Statistics
Access and download statistics

Did you know? You may want to explore EconPapers, which displays the same data as IDEAS in a different way.

This page was last updated on 2009-11-13.

This information is provided to you by IDEAS at the Department of Economics, College of Liberal Arts and Sciences, University of Connecticut using RePEc data on a server sponsored by the Society for Economic Dynamics.