|
EconStor >
Rheinische Friedrich-Wilhelms-Universität Bonn >
Bonn Graduate School of Economics (BGSE), Universität Bonn >
Bonn Econ Discussion Papers, Bonn Graduate School of Economics (BGSE), Universität Bonn >
Please use this identifier to cite or link to this item:
http://hdl.handle.net/10419/27167
|
| | |
| Title: | | Limited liability and the risk-incentive relationship  |
| Authors: | | Budde, Jörg Kräkel, Matthias |
| Issue Date: | | 2008 |
| Series/Report no.: | | Bonn econ discussion papers 2008,6 |
| Abstract: | | Several empirical findings have challenged the traditional view on the trade-off between risk and incentives. By combining risk aversion and limited liability in a standard principal-agent model the empirical puzzle ont hepositive relationship between risk and incentives can be explained. Increasing risk leads to a less informative performance signal. Under limited liability, the principal may optimally react by increasing the weight on the signal and, hence, choosing higher-powered incentives. |
| Subjects: | | moral hazard limited liability risk-incentive relationship |
| JEL: | | D82 D86 |
| Document Type: | | Working Paper |
| Appears in Collections: | | Bonn Econ Discussion Papers, Bonn Graduate School of Economics (BGSE), Universität Bonn
|
| |
| | |
Download bibliographical data as:
BibTeX
|
| |
Share on:http://hdl.handle.net/10419/27167
|
Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.
|