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dc.contributor.authorHöring, Dirken_US
dc.contributor.authorGründl, Helmuten_US
dc.date.accessioned2012-09-21en_US
dc.date.accessioned2012-09-21T12:33:39Z-
dc.date.available2012-09-21T12:33:39Z-
dc.date.issued2011en_US
dc.identifier.urihttp://hdl.handle.net/10419/64133-
dc.description.abstractThis paper investigates the question of how risk management should be embedded in a firm's hierarchy. We take an innovative approach to this question by combining the well-known capital asset pricing framework with game-theoretic thinking. We discover the conditions under which risk information adds value to an investment decision. Furthermore, we provide a theory for the integration of risk management - the provider of risk information - into an organisation based on private information and differences in preferences. A simple model analyses when a principal will choose to allow a business manager to acquire additional risk expertise to improve estimation of a project's risk characteristics. In return, the organisation's decision making will benefit from the co-ordination of private information about the project's return and risk. However, the business manager could use the private information to implement favoured projects to the detriment of the organisation. The paper derives the prerequisites under which it is advantageous for the organisation to provide the business manager with additional private information as to a project's risk characteristics so as to foster co-ordination even if the principal's and the business manager's interests are not perfectly aligned. These findings have a number of implications for the organisation of risk management.en_US
dc.language.isoengen_US
dc.publisherInternational Center for Insurance Regulation, House of Finance, Goethe University Frankfurt am Mainen_US
dc.relation.ispartofseriesICIR Working Paper Series 05/11en_US
dc.subject.ddc330en_US
dc.subject.keywordRisk Managementen_US
dc.subject.keywordOrganisationen_US
dc.subject.keywordPrivate Informationen_US
dc.subject.keywordCo-ordinationen_US
dc.subject.stwRisikomanagementen_US
dc.subject.stwOrganisationsstrukturen_US
dc.subject.stwPrinzipal-Agent-Theorieen_US
dc.subject.stwAsymmetrische Informationen_US
dc.subject.stwCapital Asset Pricing Modelen_US
dc.subject.stwSpieltheorieen_US
dc.subject.stwTheorieen_US
dc.titleRisk management's place in an organisation: A tradeoff between independence and co-ordinationen_US
dc.typeWorking Paperen_US
dc.identifier.ppn719843308en_US
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungenen_US
dc.identifier.repecRePEc:zbw:icirwp:0511-
Appears in Collections:ICIR Working Paper Series, International Center for Insurance Regulation, Universität Frankfurt

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