Do Managers with Limited Liability Take More Risky Decisions? An Information Acquisition Model

Risk-neutral individuals take more risky decisions when they have limited liability. Risk-neutral managers may not when acting as agents under contract and taking costly actions to acquire information before taking decisions. Limited liability makes it optimal to increase the reward for outcomes relatively more likely to arise from desirable than from undesirable actions. The resulting decisions may be less, rather than more, risky. Making a decision after acquiring information provides an additional reason to those in the classic principal-agent literature for using contracts with pay increasing in the return. Further results on the form of contracts are also derived.managers, risky decisions, limited liability, principal-agent contracts, asymmetric information

Efficient specific investments, incomplete contracts, and the role of market alternatives

Investment

Supplier Discretion over Provision: Theory and an Application to Medical Care

Suppliers who are better informed than purchasers, such as physicians treating insured patients, often have discretion over what to provide. This paper shows how, when the purchaser observes what is supplied but can observe neither recipient type nor the actual cost incurred, optimal provision differs from what would be efficient if the purchaser had full information, whether or not the supplier can extract informational rent. The analysis is applied to, among other things, data on tests for coronary artery disease and to Medicare diagnosis-related groups defined by the treatment given, not just the diagnosis, illustrating the biases in provision that result.supplier discretion, procurement, public provision, diagnosis-related groups, medicare, prospective payment, cost-effectiveness

Health Service Gatekeepers

Incentive contracts for gatekeepers who control patient access to specialist medical services provide too weak incentives to investigate cost further when expected cost of treatment is greater than benefit. Making gatekeepers residual claimants with a fixed fee from which treat-ment costs must be met (as with full insurers who are themselves gatekeepers) provides too strong incentives when expected cost is less than benefit. Giving patients the choice between a gatekeeper with an incentive contract and one without is unstable. With one scenario, pa- tients always prefer the latter. With another, patients have incentives to acquire information that makes incentive contracts ineffective.gatekeepers, patient referrals, general practitioners, fundholding, medical insurance, incentive contracts

General training by firms, apprentice contracts, and public policy

Workers will not pay for general on-the-job training if contracts are not enforceable. Firms may if there are mobility frictions. Private information about worker productivities, however, prevents workers who quit receiving their marginal products elsewhere. Their new employers then receive external benefits from their training. Training firms increase profits by offering apprenticeships committing them to high wages for trainees retained on completion. At those wages, only good workers are retained, which signals their productivity and reduces the external benefits if they subsequently quit. Regulation of apprenticeship length (a historically important feature) can enhance efficiency, as can appropriate subsidies.

The impact of the injection protocol on an impurity's stationary state

We examine stationary state properties of an impurity particle injected into a one-dimensional quantum gas. We show that the value of the impurity's end velocity lies between zero and the speed of sound in the gas, and is determined by the injection protocol. This way, the impurity's constant motion is a dynamically emergent phenomenon whose description goes beyond accounting for the kinematic constraints of Landau approach to superfluidity. We provide exact analytic results in the thermodynamic limit, and perform finite-size numerical simulations to demonstrate that the predicted phenomena are within the reach of the existing ultracold gases experiments.Comment: main text+supplemental, 14 pages, 3 figures; v2: title, introduction, and summary modified, 3 refs. adde

The Greatest Questions In Christendom

https://digitalcommons.acu.edu/crs_books/1366/thumbnail.jp

A transistion control system

Thesis (M.S.) Massachusetts Institute of Technology. Dept. of Aeronautical Engineering, 1955.Bibliography: leaf 119.by John C. Herther, Malcolm R. Malcomson.M.S

Bargaining and Wage Rigidity in a Matching Model for the US

The Mortensen and Pissarides (1994) matching model with all wages negotiated each period is shown inconsistent with macroeconomic wage dynamics in the US. This applies even when heterogeneous match productivities, time to build vacancies and credible bargaining are incorporated. Wage rigidity consistent with micro evidence that wages of job changers are more flexible than those of job stayers allows the model to capture these dynamics and is not inconsistent with parameter calibrations in the literature. Such wage rigidity affects only the timing of wage payments over the duration of matches, so conclusions about characteristics based on calibrations continue to apply