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Coordination failure can lead to an underemployment equilibrium. [3] Coordination failure also implies that fiscal policy can mitigate the effects of recessions, or even avoid them entirely, by moving the economy to a higher-output equilibrium. [3] [4] In game theory, coordination failure can also be analyzed by focal point (game theory). Focal ...
This results in a market failure, meaning that the wage is not being set according to the labor market's needs or preferences. A behavior of the insider-outsider model is illustrated at right, where Nd represents the optimal level of employment of labor firms and Ns represents the quantity of labor time workers desire to supply at a given wage ...
In modern contract theory, "adverse selection" characterizes principal-agent models in which an agent has private information before a contract is written. [ 23 ] [ 24 ] For example, a worker may know his effort costs (or a buyer may know his willingness-to-pay) before an employer (or a seller) makes a contract offer.
An independent agent may present you with an insurance quote from a smaller, unfamiliar company but one that still meets your needs and offers the right insurance coverage for your family.
Texas Attorney General Ken Paxton filed a lawsuit against VA Claims Insider, LLC For allegedly attempting to deceive and defraud veterans seeking disability benefits from the U.S. Department of ...
Kilgore estimated that the number of agents could decrease as much as 50% as a result of the NAR settlement, with the remaining agents likely to be "more professional, more efficient agents."
In the principal-agent model it is argued that an agent will choose a large (observable) investment level when he has a strong outside option. Yet, an agent with a weak outside option might try to bluff by also choosing a large investment, in order to make the principal believe that the agent has a strong outside option (so that the principal ...
Moral hazard includes a partnership between a principal and agent and occurs when the agent may change their behaviour or actions after a contract has been finalised which can cause adverse consequences for the principal. [16] Moral hazard is present when there is a change in the agent's behaviour after taking out insurance cover to protect ...