We analyze an investor who delegates information acquisition and investment decisions to an agent. The investor cannot monitor the agent's effort or information. Optimal pay schemes contain bonuses that increase with the net return rate of the investment, but, unlike conventional contracts, at a decreasing rate. Moreover, investments with low return rates are penalized, again unlike conventional contracts. Nevertheless, it may be optimal for the investor to reward the agent above the agent's reservation utility. We examine the role of the agent's risk attitude for the shape of the pay scheme, and whether firing after bad investments is a more effective threat than reduced pay. We also analyze how the nature of the contract changes if the agent is given bargaining power.

We analyze how insurance arrangements, labor supply, moral hazard, and outright cheating are affected by social norms. One question is under what conditions norms may improve social welfare. Another is under what conditions people should be allowed to opt out of social insurance. We introduce an informal production sector to analyze the consequences of alternative assumptions about the information available to norm enforcers. This highlights one important aspect of norms, namely, that they may compensate for the insurer's limited information.

Vad som fordras för en någorlunda väl fungerande marknad för hyreslägenheter är ett omfattande reformpaket som bl a innefattar en gradvis avveckling av hyreskontrollen, ett ökat stöd till låginkomsttagare (eventuellt i form av riktade hyressubventioner) och en mindre byråkratisk byggnadslagstiftning. En viktig fördel med att locka tillbaka privata investerare till marknaden för nybyggda hyresfastigheter är att den offentliga sektorn därmed frigör resurser för investeringar i offentligt finansierad infrastruktur och i anläggningar för sociala tjänster, som utbildning, sjukvård och äldrevård.

In this paper we treat an individual's health as a continuous variable, in contrast to the traditional literature on income insurance, where it is assumed that the individual is either able or unable to work. A continuous treatment of an individual's health sheds new light on the role of income insurance and makes it possible to capture a number of real-world phenomena that are not easily captured in the traditional, dichotomous models. In particular, we show that moral hazard is not necessarily outright fraud, but a gradual adjustment of the willingness to work, depending on preferences and the conditions stated in the insurance contract. Further, the model can easily encompass phenomena such as administrative rejection of claims, and it clarifies the conditions for the desirability of insurance in the first place.

In this paper we treat an individual’s health as a continuous variable, in contrast to the traditional literature on income insurance, where it is regularly treated as a binary variable. This is not a minor technical matter; in fact, a continuous treatment of an individual’s health sheds new light on the role and functioning of income insurance and makes it possible to capture a number of real-world phenomena that are not easily captured in binary models. In particular, moral hazard is not regarded as outright fraud, but as a gradual adjustment of the willingness to go to work when income insurance is available. Further, the model can easily encompass phenomena such as administrative rejection of claims and the role of social norms. It also gives a rich view of the desirability of insurance in the first place.