Optimal Composition of Private and Public Debt, and CEO Compensations Under Moral Hazard and Asymmetric Information

2005 ◽  
Author(s):  
Sanjay Banerji ◽  
Pinaki Bose
Keyword(s):  
Asymmetric Information ◽  
Moral Hazard ◽  
Public Debt ◽  
Optimal Composition ◽  
Private And Public

AGENCY PROBLEM DALAM PENERAPAN PEMBIAYAAN AKAD MUDHARABAH PADA PERBANKAN SYARIAH

ALQALAM ◽  
2016 ◽  
Vol 33 (1) ◽  
pp. 46
Author(s):  
Aswadi Lubis
Keyword(s):  
High Risk ◽  
Asymmetric Information ◽  
Human Resources ◽  
Moral Hazard ◽  
Adverse Selection ◽  
Agency Problem ◽  
Agency Problems ◽  
Islamic Banking ◽  
The Public

The purpose of writing this article is to describe the agency problems that arise in the application of the financing with mudharabah on Islamic banking. In this article the author describes the use of the theory of financing, asymetri information, agency problems inside of financing. The conclusion of this article is that the financing is asymmetric information problems will arise, both adverse selection and moral hazard. The high risk of prospective managers (mudharib) for their moral hazard and lack of readiness of human resources in Islamic banking is among the factors that make the composition of the distribution of funds to the public more in the form of financing. The limitations that can be done to optimize this financing is among other things; owners of capital supervision (monitoring) and the customers themselves place restrictions on its actions (bonding).

scholarly journals The Incentive Model in Supply Chain with Trade Credit and Default Risk

Complexity ◽  
2019 ◽  
Vol 2019 ◽  
pp. 1-11
Author(s):  
Hong Cheng ◽  
Yingsheng Su ◽  
Jinjiang Yan ◽  
Xianyu Wang ◽  
Mingyang Li
Keyword(s):  
Supply Chain ◽  
Asymmetric Information ◽  
Moral Hazard ◽  
Private Information ◽  
Default Risk ◽  
Trade Credit ◽  
Uncertain Demand ◽  
Market Demand ◽  
Incentive Contract ◽  
Risk Neutral

Trade credit is widely used for its advantages. However, trade credit also brings default risk to the manufacturer due to the uncertain demand. And moral hazard may aggravate the default risk. The purpose of this paper is to investigate the role of moral hazard in trade credit and explore incentive contract under uncertain demand and asymmetric information. We consider a two-echelon supply chain consisting of a risk-neutral retailer ordering a single product from a risk-neutral manufacturer. Market demand is stochastic and is influenced by retailer’s sales effort which is his private information. Incentive theory is used to develop the principal-agent model and get the incentive contract from the manufacturer’s perspective. Results show that the retailer will reduce his effort level to get more profit and the manufacturer’s profit will be reduced, in the case of asymmetric information. Facing this result, the manufacturer will reduce the order quantity in incentive contract to lessen his losses. Numerical examples are provided to illustrate all these theoretical results and to draw managerial insights.

scholarly journals Debt Origin and Investment Efficiency from Korea

2020 ◽  
Vol 8 (3) ◽  
pp. 47
Author(s):  
Heung Joo Jeon ◽  
Hyun Min Oh
Keyword(s):  
Financial Reporting ◽  
Public Debt ◽  
Negative Relationship ◽  
Optimal Investment ◽  
Capital Gains ◽  
Investment Efficiency ◽  
Private Debt ◽  
Significant Negative Relationship ◽  
Private And Public

This study empirically analyzes the effect of debt origin on investment efficiency. According to previous studies that report that the quality of financial reporting may vary depending on the origin of the debt, the empirical analysis predicted that the effects of the origin of the debt on investment efficiency would be differential. Debt origin was divided into private and public debt. The analysis results of this study are as follows. First, there is a significant negative relationship between the private debt and investment efficiency, while there is a significant positive relationship between public debt and investment efficiency. This means that capital gains under public debt may be more profitable to managers by improving the quality of their accounting information than those under private debt. This is in line with the previous research which found that, when financing with public debt, the earnings management is reduced and accounting transparency is high. This study focuses on the origin of debt as a determinant of investment efficiency and analyzes the level of investment efficiency according to the origin of debt. We examine the sustainability of firms from the perspective of investment efficiency, such as raising capital and selecting optimal investment options. The results of this study suggest that the level of incentives and investment efficiency of managers may be differentiated depending on the origin of the debt.

Competing concepts of class: implications and applications for community development

2016 ◽  
Author(s):  
Lorraine C. Minnite ◽  
Frances Fox Piven
Keyword(s):  
Community Development ◽  
Public Debt ◽  
Public Spending ◽  
Political Influence ◽  
Effective Resistance ◽  
Theory And Practice ◽  
Development Theory ◽  
Private And Public ◽  
New Phase ◽  
Tax Cuts

This chapter reviews some of the trends associated with the new phase of capitalism called ‘neoliberalism’, particularly widening inequality and its correlates in the growing political influence of the wealthiest strata. The consequences for community development include tax cuts, cuts in public spending, and mounting private and public debt. Finally, the authors consider the prospects for effective resistance within the context of community development theory and practice.

scholarly journals Optimal Contract Design for Cooperative Relay Incentive Mechanism under Moral Hazard

2015 ◽  
Vol 2015 ◽  
pp. 1-7 ◽  
Author(s):  
Nan Zhao ◽  
Minghu Wu ◽  
Wei Xiong ◽  
Cong Liu
Keyword(s):  
Asymmetric Information ◽  
Moral Hazard ◽  
Optimization Problems ◽  
Incentive Mechanism ◽  
Contract Design ◽  
Spatial Diversity ◽  
Spectrum Efficiency ◽  
Cooperative Relay ◽  
Relay Nodes ◽  
Relay Incentive

Cooperative relay can effectively improve spectrum efficiency by exploiting the spatial diversity in the wireless networks. However, wireless nodes may acquire different network information with various users’ location and mobility, channels’ conditions, and other factors, which results in asymmetric information between the source and the relay nodes (RNs). In this paper, the relay incentive mechanism between relay nodes and the source is investigated under the asymmetric information. By modelling multiuser cooperative relay as a labour market, a contract model with moral hazard for relay incentive is proposed. To effectively incentivize the potential RNs to participate in cooperative relay, the optimization problems are formulated to maximize the source’s utility while meeting the feasible conditions under both symmetric and asymmetric information scenarios. Numerical simulation results demonstrate the effectiveness of the proposed contract design scheme for cooperative relay.

Controlling innovative projects with moral hazard and asymmetric information

2008 ◽  
Vol 37 (9) ◽  
pp. 1504-1514 ◽  
Author(s):  
Rouven Bergmann ◽  
Gunther Friedl
Keyword(s):  
Asymmetric Information ◽  
Moral Hazard

Zur Reform des Rating-(Un)Wesens

2010 ◽  
Vol 61 (1) ◽  
Author(s):  
Hanno Beck ◽  
Helmut Wienert
Keyword(s):  
Asymmetric Information ◽  
Moral Hazard ◽  
Empirical Evidence ◽  
Economies Of Scale ◽  
Conflicts Of Interest ◽  
Principal Agent ◽  
Double Blind ◽  
Rating Agencies ◽  
Market Inefficiencies ◽  
Set Up

SummaryThe market for ratings suffers from several inefficiencies: asymmetric information and moral hazard lead to conflicts of interest and principal-agent-problems. Moreover, network externalities and economies of scale lead to a lack of competition in the market for ratings. There is empirical evidence for market inefficiencies as ratingshopping, herding or slow adjustment of wrong ratings to a changed environment. As a remedy for these problems, we suggest a fund where rating-orders are pooled and rated by means of a double-blind-approach. Each issuer of a security gives his product into a pool and rating agencies which meet the standards of the pool are free to tender for the mandate to rate the product. Several aspects how to set up such a pool and possible problems are being addressed in this paper.

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