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Morale hazard [PDF]

open access: possibleJournal of Monetary Economics, 2005
We interpret workers' confidence in their own skills as their morale, and investigate the implication of worker overconfidence on the firm's optimal wage-setting policies. In our model, wage contracts both provide incentives and affect worker morale, by revealing private information of the firm about worker skills.
Hanming Fang, Giuseppe Moscarini
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Moral Hazard [PDF]

open access: possible, 1999
When a principal and an agent operate with simple contracts, at equilibrium, renegotiation will occur after the action is taken. Also, since renegotiation makes incentive contracts non-credible, the principal may prefer non-renegotiable monitoring options.
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Moral Hazard

2008
The financial crisis threatens hopes to expand opportunities for underprivileged young people, but we can t afford not to invest in them.
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Repeated Moral Hazard

Econometrica, 1985
This paper considers a repeated principal agent relationship where the principal is risk neutral, the agent is risk averse, the principal can borrow or save at a fixed interest rate, and the agent discounts future consumption. It is shown that memory plays a very strong role in every Pareto-optimal contract.
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