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dc.contributor.authorBudde, Jörgen_US
dc.contributor.authorKräkel, Matthiasen_US
dc.description.abstractSeveral 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.en_US
dc.publisherGraduate School of Economics Bonnen_US
dc.relation.ispartofseriesBonn econ discussion papers 2008,6en_US
dc.subject.keywordmoral hazarden_US
dc.subject.keywordlimited liabilityen_US
dc.subject.keywordrisk-incentive relationshipen_US
dc.subject.stwMoral Hazarden_US
dc.subject.stwBeschränkte Haftungen_US
dc.subject.stwAgency Theoryen_US
dc.titleLimited liability and the risk-incentive relationshipen_US
dc.typeWorking Paperen_US
Appears in Collections:Bonn Econ Discussion Papers, Bonn Graduate School of Economics (BGSE), Universität Bonn

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