TY  - UNPD
A1  - Bertola, Giuseppe
A1  - Koeniger, Winfried
T1  - Hidden insurance in a moral hazard economy
T2  - Center for Financial Studies (Frankfurt am Main): CFS working paper series ; No. 2013,25
N2  - We consider an economy where individuals privately choose effort and trade competitively priced securities that pay off with effort-determined probability. We show that if insurance against a negative shock is sufficiently incomplete, then standard functional form restrictions ensure that individual objective functions are optimized by an effort and insurance combination that is unique and satisfies first- and second-order conditions. Modeling insurance incompleteness in terms of costly production of private insurance services, we characterize the constrained inefficiency arising in general equilibrium from competitive pricing of nonexclusive financial contracts.
T3  - CFS working paper series - 2013, 25 
KW  - hidden action
KW  - principal agent
KW  - first-order approach
KW  - constrained efficiency
Y1  - 2013
UR  - http://publikationen.ub.uni-frankfurt.de/frontdoor/index/index/docId/32502
UR  - https://nbn-resolving.org/urn:nbn:de:hebis:30:3-325027
IS  - November 2013
PB  - Center for Financial Studies
CY  - Frankfurt, M.
ER  -