Many recent institutional reforms of the financial system have relied on the introduction of an explicit scheme of Deposit Insurance. This instrument aims at two main targets, contributing to systemic stability and protecting depositors. However it may also affect the interest rate spread in the banking system, which can be viewed as an indicator of market power in this financial segment. This ...

My question, which is central to the business of moral philosophy, is implicitly addressed by many philosophers, yet explicitly addressed by only a few. In this paper I address the question head-on, and propose a qualified affirmative answer. First, however, it is important to be clear about what is meant by 'morality' and 'progress', and what the meaning of 'is' is. My characterizations will n...

Many of the important decisions we make have moral implications. Moral Foundations Theory (Haidt & Joseph, 2004) identifies 5 distinct styles of moral reasoning that may be applied to such decisions. This paper explores how reading text that emphasizes one of these styles might affect our reasoning. After participants read a series of tweets that emphasized the Fairness/Cheating foundation they...

This paper expounds on the importance of identifiabilty of subjective probabilities in agency theory with moral hazard. An application to insurance is examined.

This paper argues for the moral significance of the notion of an evil person or character. First, I argue that accounts of evil character ought to support a robust bad/evil distinction; yet existing theories cannot plausibly do so. Consequentialist and related theories also fail to account for some crucial properties of evil persons. Second, I sketch an intuitively plausible “affective-motivati...

This paper argues that self-consciousness and moral agency depend crucially on both embodied and social aspects of human existence, and that the capacity for practical wisdom, phronesis, is central to moral personhood. The nature of practical wisdom is elucidated by drawing on rival analyses of expertise. Although ethical expertise and practical wisdom differ importantly, they are alike in that...

Boards of directors serve several functions, chief among them the monitoring of the firm and management. We model the monitoring activities of directors, who themselves face a moral hazard problem and need incentives to avoid shirking. The firm simultaneously sets wage incentives for all employees (directors and workers), and also chooses the size of the firm. Larger firms are more productive, ...

Three channels through which the IMF rescue package may affect international lending can be distinguished: debtor-side moral hazard, creditor-side moral hazard, and debtor and creditorsidemoral hazard.We show that if the rescue package fully benefits the debtor, no credit contract between him and the creditor arises. The other two kinds of moral hazard, where the creditor receives the rescue pa...

We study an economy where intermediaries compete over contracts in a nonexclusive insurance market affected by moral hazard. Our setting is the same as that developed in Bisin and Guaitoli [2004]. The present note provides a counterexample to the set of necessary conditions for high effort equilibria developed in Bisin and Guaitoli [2004] and suggests an alternative equilibrium characterization.

Governments and other organizations often outsource activities to achieve cost savings from market competition. Yet such benefits are often accompanied by poor quality resulting from moral hazard, which can be particularly onerous when outsourcing the monitoring and enforcement of government regulation. In this paper, we argue that the considerable moral hazard associated with private regulator...