Using a moral hazard model, this study examines the relationship between environmental uncertainty and the adoption of decentralized IT governance. We show that this relationship is determined by a trade-off between the need for processing local information and the concern on moral hazard. The trade-off results in an inverted-U-shaped relationship between environmental uncertainty and decentral...

We consider the problem of when to deliver the contract payoff, in a continuoustime Principal-Agent setting, in the presence of moral hazard and/or adverse selection. The principal can design contracts of a simple form that induce the agent to ask for the payoff at the time of principal’s choosing. The optimal time of payment depends on the agent’s and the principal’s outside options. Examples ...

In 1938 a survey was conducted by the ARBA Committee on Ice Control on the different methods used in the treatment of icy pavements by the several states in the snow belt. Considerable information was obtained, and the findings were reported to the Association. During the past year a follow-up study has been made with the idea of presenting treating methods which could be called standard practi...

This article examines the self-reflexion of Slovenian entrepreneurs to their own business activity, with a focus on their core values and virtues, which would consequently affect the performance, growth and development of entrepreneurship in Slovenia. The article starts with a theoretical understanding of organizational values and moral virtues of entrepreneurs and review of the recent empirica...

In this paper, following the work of Hare, we consider moral reasoning not as the application of moral norms and principles, but as reasoning about what ought to be done in a particular situation, with moral norms perhaps emerging from this reasoning. We model this situated reasoning drawing on our previous work on argumentation schemes, here set in the context of Action-Based Alternating Trans...

Last changes: 11/15/10 Word Count: 6776 (main text); 9803 (total w/ footnotes)

We study privatization under moral hazard and adverse selection. We show that if the fraction of efficient investors is either insignificant or productivity differences between efficient and inefficient investors are negligible, the government would offer a pooling contract and sell the same fraction of equity to both types of investors. The lower the productivity difference, the greater the eq...

This paper describes the incentives for firms to seek voluntary product safety certifications. We consider a firm which makes the decision of whether or not to seek certification prior to selling the product. We show that, even when the firm and the consumers have same beliefs about the product safety there are incentives for the firm to seek safety certification. The main analysis investigates...

Using individual policies and claims data from the Croatian mandatory motor insurance we test the theoretical proposition that under moral hazard, experience rated pricing scheme should generate the negative state dependence in claims, i.e. that drivers should drive more safely after they had an accident. The empirical challenge in these tests is to disentangle the state dependence from unobser...