Adverse Selection and Moral Hazard in Contract Law

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Author: Nicole Petrick

Publisher: GRIN Verlag

ISBN: 3640394127

Category:

Page: 24

View: 5663

Essay aus dem Jahr 2005 im Fachbereich BWL - Recht, Note: 1,7, Higher School of Economics Moscow, Russia, Sprache: Deutsch, Anmerkungen: Legal and economical interpretations of contract, contract law and contract theory, asymmetric information, adverse selection and moral hazard. Paper explains negative effects of adverse selection and moral hazard for the case of transaction costs and incomplete contracts and describes incentives to avoid adverse selection and moral hazard, such as signaling and deductibles as well as indemnity contracts and valued contracts., Abstract: Legal and economical interpretations of contract, contract law and contract theory, asymmetric information, adverse selection and moral hazard. Paper explains negative effects of adverse selection and moral hazard for the case of transaction costs and incomplete contracts and describes incentives to avoid adverse selection and moral hazard, such as signaling and deductibles as well as indemnity contracts and valued contracts.

Readings in the Economics of Contract Law

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Author: Victor P. Goldberg

Publisher: Cambridge University Press

ISBN: 9780521349208

Category: Business & Economics

Page: 252

View: 6709

This collection brings together some of the main contributions to an important area of this work, the economics of contract law.

Agricultural Law and Economics in Sub-Saharan Africa

Cases and Comments

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Author: Frederick Owusu Boadu

Publisher: Academic Press

ISBN: 0128018453

Category: Business & Economics

Page: 624

View: 9598

Agricultural Law in Sub-Saharan Africa: Cases and Comments introduces the subject of agricultural law and economics to researchers, practitioners, and students in common law countries in Sub-Saharan Africa, and presents information from the legal system in Botswana, Gambia, Ghana, Lesotho, Malawi, Nigeria, Sierra Leone, South Africa, Swaziland, Tanzania, Zambia, and Zimbabwe. The law and economics approach entails the use of quantitative methods in research. This is consistent with the expectations in an applied economics field such as agricultural economics. Covering the general traditional law topics in contracts, torts, and property, the book goes further to introduce cutting-edge and region-relevant topics, including contracts with illiterate parties, contract farming, climate change, and transboundary water issues. The book is supported by an extensive list of reference materials, as well as study and enrichment exercises, to deepen readers’ understanding of the principles discussed in the book. It is a learning tool, first and foremost, and can be used as a stand-alone resource to teach the subject matter of agricultural law and economics to professionals new to the subject area as well as to students in law school, agricultural economics, economics, and inter-disciplinary classes. Offers research findings on such topics as food safety, climate change, transboundary natural resources, international sale of goods, patents, and trademarks to highlight the future sources of pressure on the agriculture industry Uses case-studies to provide real-world insights into the challenges and considerations of appropriate agricultural law development Challenges readers to carry out their own research in their areas of study, and to gain some understanding of the relationship between law, economics, and statistics Includes extensive resources, such as chapter summaries, study questions, and challenge questions at the end of each chapter to assist instructors and students in gaining full benefits from using the book Provides separate instructor and student study guides, a test bank, and test bank answers, in hardcopy and electronic formats

Economic Analysis of Contract Law

Incomplete Contracts and Asymmetric Information

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Author: Sugata Bag

Publisher: Springer

ISBN: 3319652680

Category: Law

Page: 203

View: 1772

This book examines the main issues arising in economic analysis of contract law with special attention given to the incomplete contracts. It discusses both the main features of contract law as they relate to the problem of economic exchange, and how the relevant legal rules and the institutions can be analysed from an economic perspective. Evaluate the welfare impacts, analyses the effects and the desirability of different breach remedies and examines the optimal incentive structure of party-designed liquidated damages under the different dimensions of informational asymmetry. Overall the book aims to contribute to the legal debate over the adoption of the specific breach remedies when the breach victim’s expectation interest is difficult to assess, and to the debate over courts' reluctance to implement large penalties in the event of breach of contracts.

Framing Contract Law

An Economic Perspective

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Author: Victor P. Goldberg

Publisher: Harvard University Press

ISBN: 9780674023123

Category: Business & Economics

Page: 411

View: 9970

The central theme of this book is that an economic framework--incorporating such concepts as information asymmetry, moral hazard, and adaptation to changed circumstances--is appropriate for contract interpretation, analyzing contract disputes, and developing contract doctrine. The value of the approach is demonstrated through the close analysis of major contract cases. In many of the cases, had the court (and the litigators) understood the economic context, the analysis and results would have been very different. Topics and some representative cases include consideration (Wood v. Lucy, Lady Duff Gordon), interpretation (Bloor v. Falstaff and Columbia Nitrogen v. Royster), remedies (Campbell v. Wentz, Tongish v. Thomas, and Parker v. Twentieth Century Fox), and excuse (Alcoa v. Essex).

Economics of Contract Law

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Author: Douglas G. Baird

Publisher: Edward Elgar Pub

ISBN: N.A

Category: Law

Page: 656

View: 474

'This book will serve as the essential resource for anyone interested in the economic analysis of contract law. Baird has included both the iconic articles of the past and the recent works which define the cutting edge of scholarship in the area. This volume is that rare collection that offers a snapshot of the current academic learning across the field. It is both an invaluable resource for those first exploring the economic analysis of contract law as well as a useful reference for the initiated.' - Robert Rasmussen, Vanderbilt University, US This important volume presents a rich collection of ideas on and insights into the law and economics of contracts. It includes material relevant to a large number of legal fields. Many of the articles are classics that have, over the years, become focal points for continuing debate; others provide an easily accessible account of particular areas. the editor's comprehensive introduction provides an overview of law and economics scholarship in contracts over the past few decades and a portal into an evolving field.

Corporate Risk Management

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Author: Donald H. Chew

Publisher: Columbia University Press

ISBN: 0231513003

Category: Business & Economics

Page: 480

View: 2824

More than thirty leading scholars and finance practitioners discuss the theory and practice of using enterprise-risk management (ERM) to increase corporate values. ERM is the corporate-wide effort to manage the right-hand side of the balance sheet a firm's total liability structure-in ways that enable management to make the most of the firm's assets. While typically working to stabilize cash flows, the primary aim of a well-designed risk management program is not to smooth corporate earnings, but to limit the possibility that surprise outcomes can threaten a company's ability to fund its major investments and carry out its strategic plan. Contributors summarize the development and use of risk management products and their practical applications. Case studies involve Merck, British Petroleum, the American airline industry, and United Grain Growers, and the conclusion addresses a variety of topics that include the pricing and use of certain derivative securities, hybrid debt, and catastrophe bonds. Contributors: Tom Aabo (Aarhus School of Business); Albéric Braas and Charles N. Bralver (Oliver, Wyman & Company); Keith C. Brown (University of Texas at Austin); David A. Carter (Oklahoma State University); Christopher L. Culp (University of Chicago); Neil A. Doherty (University of Pennsylvania); John R. S. Fraser (Hyrdo One, Inc.); Kenneth R. French (University of Chicago); Gerald D. Gay (Georgia State University); Jeremy Gold (Jeremy Gold Pensions); Scott E. Harrington (University of South Carolina); J. B. Heaton (Bartlit Beck Herman Palenchar & Scott LLP); Joel Houston (University of Florida); Nick Hudson (Stern Stewart & Co.); Christopher James (University of Florida); A. John Kearney and Judy C. Lewent (Merck & Co., Inc.); Robert C. Merton and Lisa K. Meulbroek (Harvard Business School); Merton H. Miller (University of Chicago); Jouahn Nam (Pace University); Andrea M. P. Neves (CP Risk Management LLC); Brian W. Nocco (Nationwide Insurance); André F. Perold (Harvard Business School); S. Waite Rawls III (Continental Bank); Kenneth J. Risko (Willis Risk Solutions); Angelika Schöchlin (University of St. Gallen); Betty J. Simkins (Oklahoma State University); Donald J. Smith (Boston University); Clifford W. Smith Jr. (University of Rochester); Charles W. Smithson (Continental Bank); René M. Stulz (Ohio State University); D. S All the articles that comprise this book were first published in the Journal of Applied Corporate Finance. Morgan Stanley's ownership of the journal is a reflection of its commitment to identifying outstanding academic research and promoting its application in the practicing corporate and investment communities.

The Economics of Contracts

A Primer

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Author: Bernard Salanié

Publisher: MIT Press

ISBN: 0262195259

Category: Business & Economics

Page: 244

View: 5329

A concise introduction to the theory of contracts, emphasizing basic tools that allow the reader to understand the main theoretical models; revised and updated throughout for this edition.

Handbook of Insurance

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Author: Georges Dionne

Publisher: Springer Science & Business Media

ISBN: 9780792379119

Category: Business & Economics

Page: 974

View: 364

In the 1970's, the research agenda in insurance was dominated by optimal insurance coverage, security design, and equilibrium under conditions of imperfect information. The 1980's saw a growth of theoretical developments including non-expected utility, price volatility, retention capacity, the pricing and design of insurance contracts in the presence of multiple risks, and the liability insurance crisis. The empirical study of information problems, financial derivatives, and large losses due to catastrophic events dominated the research agenda in the 1990's. The Handbook of Insurance provides a single reference source on insurance for professors, researchers, graduate students, regulators, consultants, and practitioners, that reviews the research developments in insurance and its related fields that have occurred over the last thirty years. The book starts with the history and foundations of insurance theory and moves on to review asymmetric information, risk management and insurance pricing, and the industrial organization of insurance markets. The book ends with life insurance, pensions, and economic security. Each chapter has been written by a leading authority in insurance, all contributions have been peer reviewed, and each chapter can be read independently of the others.

Automobile Insurance: Road Safety, New Drivers, Risks, Insurance Fraud and Regulation

Road Safety, New Drivers, Risks, Insurance Fraud and Regulation

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Author: Georges Dionne,Claire Laberge-Nadeau

Publisher: Springer Science & Business Media

ISBN: 9780792383949

Category: Business & Economics

Page: 351

View: 6440

Motor vehicle accidents are still a leading cause of death, even if the trend has somewhat declined over the past 20 years. Indeed, motor vehicle accidents are a significant cause of death in comparison with air and space transport accidents, homicides and even HIV infections, causes which are more often highlighted in the media. As shown in this book, motor vehicle accidents are particularly damaging to very young drivers. The assessment of driving risks is a common concern for road transportation safety and the automobile insurance industry. In both cases, there is an awareness of the great losses resulting from the deaths, injuries and property damage caused by traffic accidents. Research is essential to counteract this public health threat, to assess the success or failure of countermeasures, and to solve the problems it generates in the insurance industry. This book is for people concerned about road crashes (prevention and compensation) and about the insurance problems they pose - namely private and public institutional authorities, consultants, administrators, practitioners, and researchers interested in sharing the authors' experience in this domain. The book presents original contributions related to motor vehicle insurance and road safety. All papers have been evaluated by external referees. Four subjects are covered: 1) Automobile Insurance Pricing, Risks and Asymmetric Information; 2) Insurance Fraud; 3) Young Drivers: Licensing Policies, Evaluation and Risks; and 4) Road Insurance Regulation.

The Foundations of International Investment Law

Bringing Theory into Practice

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Author: Zachary Douglas,Joost Pauwelyn,Jorge E. Viñuales

Publisher: OUP Oxford

ISBN: 0191508586

Category: Law

Page: 586

View: 2492

International investment law is one of the fastest growing areas of international law. It has led to the signing of thousands of agreements, mostly in the form of investment contracts and bilateral investment treaties. Also, in the last two decades, there has been an exponential growth in the number of disputes being resolved by investment arbitration tribunals. Yet the legal principles at the basis of international investment law and arbitration remain in a state of flux. Perhaps the best illustration of this phenomenon is the wide disagreement among investment tribunals on some of the core concepts underpinning the regime, such as investment, property, regulatory powers, scope of jurisdiction, applicable law, or the interactions with other areas of international law. The purpose of this book is to revisit these conceptual foundations in order to shed light on the practice of international investment law. It is an attempt to bridge the growing gap between the theory and the practice of this thriving area of international law. The first part of the book focuses on the 'infrastructure' of the investment regime or, more specifically, on the structural arrangements that have been developed to manage foreign investment transactions and the potential disputes arising from them. The second part of the book identifies the common conceptual bases of an array of seemingly unconnected practical problems in order to clarify the main stakes and offer balanced solutions. The third part addresses the main sources of 'regime stress' as well as the main legal mechanisms available to manage such challenges to the operation of the regime. Overall, the book offers a thorough investigation of the conflicting theoretical positions underlying international investment law, testing their worth by reference to concrete issues that have arisen in the jurisprudence. It demonstrates that many of the most important practical questions arising in practice can be addressed by a carefully dosed resort to theory.

Country Risk Analysis

A Handbook

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Author: Ronald L. Solberg

Publisher: Routledge

ISBN: 1134898428

Category: Business & Economics

Page: 328

View: 5357

Country-Risk Analysis is a comprehensive, practical guide to the management of international risk and cross-border lending. The last fifteen years of international commercial bank lending have witnessed a classical boom-and-bust cycle. Yet it is only recently that a formalized approach to country risk assessment has been implemented in the major international banks. Ron Solberg's volume provides a state-of-the-art review of the country risk techniques that have evolved in the context of dramatic changes in developing countries' debt service capacity and in international lending itself. It deals comprehensively with sovereign credit decision making, portfolio management, lending behaviour and financial innovations.

The Theory of Incentives

The Principal-Agent Model

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Author: Jean-Jacques Laffont,David Martimort

Publisher: Princeton University Press

ISBN: 9781400829453

Category: Business & Economics

Page: 440

View: 1607

Economics has much to do with incentives--not least, incentives to work hard, to produce quality products, to study, to invest, and to save. Although Adam Smith amply confirmed this more than two hundred years ago in his analysis of sharecropping contracts, only in recent decades has a theory begun to emerge to place the topic at the heart of economic thinking. In this book, Jean-Jacques Laffont and David Martimort present the most thorough yet accessible introduction to incentives theory to date. Central to this theory is a simple question as pivotal to modern-day management as it is to economics research: What makes people act in a particular way in an economic or business situation? In seeking an answer, the authors provide the methodological tools to design institutions that can ensure good incentives for economic agents. This book focuses on the principal-agent model, the "simple" situation where a principal, or company, delegates a task to a single agent through a contract--the essence of management and contract theory. How does the owner or manager of a firm align the objectives of its various members to maximize profits? Following a brief historical overview showing how the problem of incentives has come to the fore in the past two centuries, the authors devote the bulk of their work to exploring principal-agent models and various extensions thereof in light of three types of information problems: adverse selection, moral hazard, and non-verifiability. Offering an unprecedented look at a subject vital to industrial organization, labor economics, and behavioral economics, this book is set to become the definitive resource for students, researchers, and others who might find themselves pondering what contracts, and the incentives they embody, are really all about.

Principles of Insurance Law

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Author: Jeffrey W. Stempel,Peter N. Swisher,Erik S. Knutsen

Publisher: LexisNexis

ISBN: 1579116507

Category: Law

Page: 1376

View: 5242

Over the past two decades, there have been a number of important developments in the areas of liability, property, and life and health insurance that have significantly changed insurance law. Accordingly, the Fourth Edition of Principles of Insurance Law has been substantially rewritten, reformatted, and refocused in order to offer the insurance law student and practitioner a broad perspective of both traditional insurance law concepts and cutting-edge legal issues affecting contemporary insurance law theory and practice. This edition not only expands the scope of topical coverage, but also segments the law of insurance in a manner more amenable to study, as well as facilitating the recombination and reordering of the chapters as desired by individual instructors. The Fourth Edition of Principles of Insurance Law includes new and expanded treatment of important insurance law developments, including: • The critical role of insurance binders as temporary forms of insurance as illustrated in the World Trade Center property insurance disputes resulting from the terrorist attacks of September 11, 2001; • The continuing debate between "legal formalists" and "legal functionalists" for "the heart and soul" of insurance contract law; • What constitutes a policyholder's "reasonable expectation" regarding coverage; • The current property and liability insurance "crisis"; • Risk management and self-insurance issues; • Emerging, and frequently conflicting, case law concerning the intersection of insurance law and federal anti-discrimination regulation; • Ongoing interpretive battles over the preemptive scope of ERISA; • The United States Supreme Court ruling that a California statute attempting to leverage European insurers into honoring commitments to Holocaust era policies is preempted by the Executive's power over foreign affairs; • The State Farm v. Campbell decision, which struck down a $145 million punitive damages award in an insurance bad faith claim as well as setting more restrictive parameters for the recovery of punitive damages; • New issues over the dividing line between "tangible" property typically covered under a property insurance policy and "intangible" property, which is typically excluded - an issue of increasing importance in the digital and cyber age; • Refinement of liability insurance law regarding trigger of coverage, duty to defend, reimbursement of defense costs, and apportionment of insurer and policyholder responsibility for liability payments; • The difficult-to-harmonize decisions concerning when a loss arises out of the "use" of an automobile; • Insurer bad faith and the availability, if any, of actions against a policyholder for "reverse bad faith"; and • The degree to which excess insurance and reinsurance may be subject to modified approaches to insurance policy construction.

Structured Finance and Insurance

The ART of Managing Capital and Risk

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Author: Christopher L. Culp

Publisher: John Wiley & Sons

ISBN: 1118160991

Category: Business & Economics

Page: 892

View: 6140

Praise for Structured Finance & Insurance "More and more each year, the modern corporation must decide whatrisks to keep and what risks to shed to remain competitive and tomaximize its value for the capital employed. Culp explains thetheory and practice of risk transfer through either balance sheetmechanism such as structured finance, derivative transactions, orinsurance. Equity is expensive and risk transfer is expensive. Asunderstanding grows, and, as a result, costs continue to fall, ARTwill continue to replace equity as the means to cushion knowablerisks. This book enhances our understanding of ART." --Myron S. Scholes, Frank E. Buck Professor of Finance, Emeritus,Graduate School of Business, Stanford University "A must-read for everyone offering structured finance as abusiness, and arguably even more valuable to any one expected topay for such service." --Norbert Johanning, Managing Director, DaimlerChrysler FinancialServices "Culp's latest book provides a comprehensive account of the mostimportant financing and risk management innovations in bothinsurance and capital markets. And it does so by fitting theseinnovative solutions and products into a single, unified theory offinancial markets that integrates the once largely separatedisciplines of insurance and risk management with the currenttheory and practice of corporate finance." --Don Chew, Editor, Journal of Applied Corporate Finance (a MorganStanley publication) "This exciting book is a comprehensive read on alternativeinsurance solutions available to corporations. It focuses on thereal benefits, economical and practical, of alternatives such ascaptives, rent-a-captive, and mutuals. An excellent introduction tothe very complex field of alternative risk transfer (ART)." --Paul Wohrmann, PhD, Head of the Center of Excellence ART andmember of theExecutive Management of Global Corporate in Europe,Zurich Financial Services "Structured Finance and Insurance transcends Silos to reach theEnterprise Mountaintop. Culp superbly details integrated, captive,multiple triggers and capital market products, and provides thearchitectural blueprints for enterprise risk innovation." --Paul Wagner, Director, Risk Management, AGL Resources Inc.

Öffentliche Finanzen in der Demokratie

Eine Einführung in die Finanzwissenschaft

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Author: Charles B. Blankart

Publisher: Vahlen

ISBN: 3800644517

Category: Business & Economics

Page: 752

View: 3837

"Vollständig überarbeitet und inhaltlich erweitert liegt das finanzwissenschaftliche Standardwerk des emeritierten Berliner VWL-Professors Blankart nun in neuer Auflage vor. Der entscheidende Unterschied zur traditionellen Finanzwissenschaft ist der Verzicht auf unrealistische Annahmen, was das Verhalten von Politikern betrifft." in: Studium 5/2012 Dieser Klassiker liefert ein anschauliches Instrumentarium, mit dem praktische Probleme der Politik mit wissenschaftlichem Standard behandelt werden können. Erläutert werden die wohlfahrtsökonomische Wirkungslehre sowie die finanzwissenschaftliche Entscheidungslehre. Vorteile * Hervorragender Überblick über die wichtigsten klassischen und aktuellen Themen der Ökonomie des Staates * Das aktuelle Wissen zu Staatsausgaben, Steuern und Staatsschulden, Staatsfinanzkrisen, Altersvorsorge, Renten- und Krankenversicherung, Umwelt- und Klimaökonomik Autor Prof. Dr. Charles B. Blankart lehrt an der Humboldt-Universität zu Berlin und an der Universität Luzern.

The Oxford Handbook of Behavioral Economics and the Law

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Author: Eyal Zamir,Doron Teichman

Publisher: Oxford University Press

ISBN: 0199397953

Category: Psychology

Page: 496

View: 6673

The past twenty years have witnessed a surge in behavioral studies of law and law-related issues. These studies have challenged the application of the rational-choice model to legal analysis and introduced a more accurate and empirically grounded model of human behavior. This integration of economics, psychology, and law is breaking exciting new ground in legal theory and the social sciences, shedding a new light on age-old legal questions as well as cutting edge policy issues. The Oxford Handbook of Behavioral Economics and Law brings together leading scholars of law, psychology, and economics to provide an up-to-date and comprehensive analysis of this field of research, including its strengths and limitations as well as a forecast of its future development. Its 29 chapters organized in four parts. The first part provides a general overview of behavioral economics. The second part comprises four chapters introducing and criticizing the contribution of behavioral economics to legal theory. The third part discusses specific behavioral phenomena, their ramifications for legal policymaking, and their reflection in extant law. Finally, the fourth part analyzes the contribution of behavioral economics to fifteen legal spheres ranging from core doctrinal areas such as contracts, torts and property to areas such as taxation and antitrust policy.

The Law of Corporate Finance: General Principles and EU Law

Volume II: Contracts in General

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Author: Petri Mäntysaari

Publisher: Springer Science & Business Media

ISBN: 9783642030550

Category: Law

Page: 426

View: 7643

1. 1 Investments, Generic Contracts, Payments According to Volume I, contracts are one of the five generic legal tools used to manage cash flow, risk, agency relationships, and information. Many investments are therefore based on one or more contracts. Obviously, the firm should draft good contracts. Good drafting can ensure the same intended cash flow with reduced risk. Bad drafting can increase risk. This volume attempts to deconstruct contracts used by non-financial firms and analyse them from a cash flow, risk, agency, and information perspective. The starting point is a generic contract, i. e. a contract which does not belong to any particular contract type (Chapters 2–7). This volume will also focus on payment obligations. Payment obligations are characteristic of all financial instruments, and they can range from simple payment obligations in minor sales contracts and traditional lending contracts (Chapters 8– 11). 1. 2 Particular Contract Types A number of particular contract types have been discussed in the other volumes of this book. (1) A certain party’s investment contract can be another party’s fu- ing contract. Particular investment contracts will therefore be discussed in Volume III in the context of funding. (2) Many contracts are necessary in the context of business acquisitions discussed in Volume III. (3) Multi-party contracts are c- mon in corporate finance. The firm’s contracts with two or more parties range from syndicated loans to central counterparties’ contracts. Such contracts will be discussed both in Chapter 12 and Volume III.