Risk Sharing, Risk Spreading and Efficient Regulation
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Beschreibung
The book provides an integrated approach to risk sharing, risk spreading and efficient regulation through principal agent models. It emphasizes the role of information asymmetry and risk sharing in contracts as an alternative to transaction cost considerations. It examines how contracting, as an institutional mechanism to conduct transactions, spreads risks while attempting consolidation. It further highlights the shifting emphasis in contracts from Coasian transaction cost saving to risk sharing and shows how it creates difficulties associated with risk spreading, and emphasizes the need for efficient regulation of contracts at various levels.
Each of the chapters is structured using a principal agent model, and all chapters incorporate adverse selection (and exogenous randomness) as a result of information asymmetry, as well as moral hazard (and endogenous randomness) due to the self-interest-seeking behavior on the part of the participants.
The book provides an integrated approach to risk sharing, risk spreading and efficient regulation through principal agent models. It emphasizes the role of information asymmetry and risk sharing in contracts as an alternative to transaction cost considerations. It examines how contracting, as an institutional mechanism to conduct transactions, spreads risks while attempting consolidation. It further highlights the shifting emphasis in contracts from Coasian transaction cost saving to risk sharing and shows how it creates difficulties associated with risk spreading, and emphasizes the need for efficient regulation of contracts at various levels.
Each of the chapters is structured using a principal agent model, and all chapters incorporate adverse selection (and exogenous randomness) as a result of information asymmetry, as well as moral hazard (and endogenous randomness) due to the self-interest-seeking behavior on the part of the participants.
Emphasizes the need for contract design to encompass risk spreading as well as efficient regulation in addition to risk sharing Provides an analysis of information dissemination including technology transfer, cost sharing, warranties and insurance to signal the quality of products, securitization and other financial instruments resulting in financial crises, and ex ante as well as ex post regulation of contracts Demonstrates the possibility that inefficiencies in contracts may far exceed those resulting from free market operation
Autor*in
T.V.S. Ramamohan Rao
Themen in »Risk Sharing, Risk Spreading and Efficient Regulation«
Cost Sharing Financial Crises and Regulation Information Asymmetry Principal agent Models Risk Sharing Securitization and Regulatory Policy