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A primer on moral-hazard models

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  • Edward Simpson Prescott

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  • Edward Simpson Prescott, 1999. "A primer on moral-hazard models," Economic Quarterly, Federal Reserve Bank of Richmond, issue Win, pages 47-78.
  • Handle: RePEc:fip:fedreq:y:1999:i:win:p:47-78
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    File URL: http://www.richmondfed.org/publications/research/economic_quarterly/1999/winter/pdf/prescott.pdf
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    References listed on IDEAS

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    1. Phelan, C. & Townsend, R.M., 1990. "Computing Multiperiod, Information-Constrained Optima," University of Chicago - Economics Research Center 90-13, Chicago - Economics Research Center.
    2. George J. Benston & George G. Kaufman, 1998. "Deposit insurance reform in the FDIC Improvement Act: the experience to date," Economic Perspectives, Federal Reserve Bank of Chicago, issue Q II, pages 2-20.
    3. Hansen, Gary D., 1985. "Indivisible labor and the business cycle," Journal of Monetary Economics, Elsevier, vol. 16(3), pages 309-327, November.
    4. Rogerson, William P, 1985. "The First-Order Approach to Principal-Agent Problems," Econometrica, Econometric Society, vol. 53(6), pages 1357-1367, November.
    5. Ethan Ligon & Jonathan P. Thomas & Tim Worrall, 2000. "Mutual Insurance, Individual Savings and Limited Commitment," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 3(2), pages 216-246, April.
    6. Richard Arnott & Joseph E. Stiglitz, 1988. "Randomization with Asymmetric Information," RAND Journal of Economics, The RAND Corporation, vol. 19(3), pages 344-362, Autumn.
    7. Paul H. Kupiec & James M. O'Brien, 1995. "A pre-commitment approach to capital requirements for market risk," Proceedings 475, Federal Reserve Bank of Chicago.
    8. Jewitt, Ian, 1988. "Justifying the First-Order Approach to Principal-Agent Problems," Econometrica, Econometric Society, vol. 56(5), pages 1177-1190, September.
    9. John H. Kareken, 1983. "Deposit insurance reform or deregulation is the cart, not the horse," Quarterly Review, Federal Reserve Bank of Minneapolis, issue Spr.
    10. Sevin Yeltekin, 1998. "Dynamic Principal-Multiple Agent Contracts," Computational Economics 9807001, EconWPA.
    11. Rogerson, Richard, 1988. "Indivisible labor, lotteries and equilibrium," Journal of Monetary Economics, Elsevier, vol. 21(1), pages 3-16, January.
    12. Andreas Lehnert, 1998. "Asset pooling, credit rationing, and growth," Finance and Economics Discussion Series 1998-52, Board of Governors of the Federal Reserve System (U.S.).
    13. Robert Avery & Patricia Beeson & Paul Calem, 1997. "Using HMDA Data as a Regulatory Screen for Fair Lending Compliance," Journal of Financial Services Research, Springer;Western Finance Association, vol. 11(1), pages 9-42, February.
    14. Jensen, Michael C & Murphy, Kevin J, 1990. "Performance Pay and Top-Management Incentives," Journal of Political Economy, University of Chicago Press, vol. 98(2), pages 225-264, April.
    15. Mussa, Michael & Rosen, Sherwin, 1978. "Monopoly and product quality," Journal of Economic Theory, Elsevier, vol. 18(2), pages 301-317, August.
    16. Ronald A. Dye, 1986. "Optimal Monitoring Policies in Agencies," RAND Journal of Economics, The RAND Corporation, vol. 17(3), pages 339-350, Autumn.
    17. 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.
    18. Myerson, Roger B., 1982. "Optimal coordination mechanisms in generalized principal-agent problems," Journal of Mathematical Economics, Elsevier, vol. 10(1), pages 67-81, June.
    19. Edward Simpson Prescott, 1998. "Computing moral-hazard problems using the Dantzig-Wolfe decomposition algorithm," Working Paper 98-06, Federal Reserve Bank of Richmond.
    20. Eskander Alvi, 1997. "First-Order Approach to Principal-Agent Problems: A Generalization," The Geneva Risk and Insurance Review, Palgrave Macmillan;International Association for the Study of Insurance Economics (The Geneva Association), vol. 22(1), pages 59-65, June.
    21. Cole, Harold Linh, 1989. "General Competitive Analysis in an Economy with Private Information: Comment," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 30(1), pages 249-252, February.
    22. Dixit, Avinash & Besley, Timothy, 1997. " James Mirrlees' Contributions to the Theory of Information and Incentives," Scandinavian Journal of Economics, Wiley Blackwell, vol. 99(2), pages 207-235, June.
    23. Ron J. Feldman & Arthur J. Rolnick, 1998. "Fixing FDICIA: a plan to address the too-big-to-fail problem," Annual Report, Federal Reserve Bank of Minneapolis, issue Mar, pages 2-22.
    24. Jeffrey M. Lacker, 1989. "Limited commitment and costly enforcement," Working Paper 90-02, Federal Reserve Bank of Richmond.
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    Citations

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    Cited by:

    1. Prescott, Edward C. & Shell, Karl, 2002. "Introduction to Sunspots and Lotteries," Journal of Economic Theory, Elsevier, vol. 107(1), pages 1-10, November.
    2. Dobeli, Barbara & Vanini, Paolo, 2004. "An analysis of IMF-induced moral hazard," Journal of Banking & Finance, Elsevier, vol. 28(12), pages 2933-2956, December.
    3. Marshall, David A. & Prescott, Edward Simpson, 2006. "State-contingent bank regulation with unobserved actions and unobserved characteristics," Journal of Economic Dynamics and Control, Elsevier, vol. 30(11), pages 2015-2049, November.
    4. Edward Simpson Prescott, 2002. "Can risk-based deposit insurance premiums control moral hazard?," Economic Quarterly, Federal Reserve Bank of Richmond, issue Spr, pages 87-100.
    5. Jorge Aseff & Manuel Santos, 2005. "Stock options and managerial optimal contracts," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 26(4), pages 813-837, November.
    6. Alexander Karaivanov, 2002. "Computing Moral Hazard Programs With Lotteries Using Matlab," Computational Economics 0201001, EconWPA.
    7. Marshall, David A. & Prescott, Edward Simpson, 2001. "Bank capital regulation with and without state-contingent penalties," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 54(1), pages 139-184, June.
    8. Prescott, Edward Simpson, 2004. "Computing solutions to moral-hazard programs using the Dantzig-Wolfe decomposition algorithm," Journal of Economic Dynamics and Control, Elsevier, vol. 28(4), pages 777-800, January.
    9. Gwenael Piaser, 2005. "Stochastic and deterministic menus in common agency games," Economics Bulletin, AccessEcon, vol. 4(11), pages 1-6.
    10. Pandey, Vivek & Shanoyan, Aleksan & Ross, Brent, 2010. "Governance Issues in the Principal-Agent Framework: Producing Cellulosic Ethanol in Michigan," 2010 Annual Meeting, July 25-27, 2010, Denver, Colorado 61362, Agricultural and Applied Economics Association.
    11. Richter, Francisca G.-C. & Diaz, Edgar F. Pebe & Brorsen, B. Wade & Currier, Kevin, 2003. "Using Both Sociological and Economic Incentives to Reduce Moral Hazard," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 28(02), August.
    12. Marshall, David A. & Prescott, Edward Simpson, 2006. "State-contingent bank regulation with unobserved actions and unobserved characteristics," Journal of Economic Dynamics and Control, Elsevier, vol. 30(11), pages 2015-2049, November.
    13. Alexander Karaivanov, 2003. "Financial Contracts and Occupational Choice," Computing in Economics and Finance 2003 25, Society for Computational Economics.
    14. repec:ebl:ecbull:v:4:y:2005:i:11:p:1-6 is not listed on IDEAS
    15. Rodolfo Apreda, 2001. "The Brokerage of Asymmetric Information," CEMA Working Papers: Serie Documentos de Trabajo. 190, Universidad del CEMA.
    16. Shehzad, Choudhry Tanveer & De Haan, Jakob, 2015. "Supervisory powers and bank risk taking," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 39(C), pages 15-24.

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    Keywords

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