To the despair of almost every informed economist, by New Year’s Day, Medicare recipients who want coverage for 2006 will have chosen a prescription drug plan. Even the former chairman of the ...

Why would a big bank with so much at stake not care about the risks that they were taking? Well, at that point, they'd all been bailed out. I mean, my feeling at that point was, well, of course they ...

I want to revisit the subject of moral hazard and the financial crisis, which I posted about yesterday, because I think the argument I made has been misunderstood in an important way, and because I ...

We study a two-period moral hazard problem with risk-neutral and wealthconstrained agents and three identical tasks. We show that the allocation of tasks over time is important if there is a capacity ...

I’ve been making the argument that while moral hazard, in the wake of the financial crisis, is now a serious problem (because of the implicit guarantee that big banks will not be allowed to fail), it ...

To date we have taken apart the firm and examined where institutions offer no advantage over bargaining by individuals, or relying on the price mechanism. We have seen two early explanations for ...

We study the propagation of financial crises among regions in which banks are protected by limited liability and may take excessive risk. The regions are affected by negatively correlated liquidity ...

To date we have taken apart the firm and examined where institutions offer no advantage over bargaining by individuals, or relying on the price mechanism. We have seen two early explanations for ...

Desperate times call for desperate measures. In recent years and in the face of unprecedented changes in the climate system, some previously unknown and risky solutions have been proposed to put a ...

At a time when the American Left wants to introduce Swedish-style socialism into the U.S., we should remember that generous welfare states pose a moral hazard. Their well-intentioned policies ...

Florida’s home insurance market has long been a mess. With private property insurance getting scarcer and more expensive, some members of the legislature are pushing for an even greater role for the ...