Moral Hazard and Observability
E680268
"Moral Hazard and Observability" is a seminal economic paper by Bengt Holmström that develops the theory of optimal incentive contracts under conditions of hidden actions and imperfect information.
All labels observed (2)
| Label | Occurrences |
|---|---|
| Holmström’s informativeness principle | 1 |
| Moral Hazard and Observability canonical | 1 |
How this entity was disambiguated
This entity first appeared as the object of triple T7651538 — resolving that mention is where its identity was fixed. The disambiguator weighed these candidate entities and picked the highlighted one (or “None”, minting a new entity). This is how homonymy is resolved: the same surface form can point to different entities.
NED1
Entity disambiguation (via context triple)
gpt-5-mini-2025-08-07
Target entity: Moral Hazard and Observability Context triple: [Bengt Holmström, notableWork, Moral Hazard and Observability]
-
A.
The Prudential Regulation of Banks (with Mathias Dewatripont)
"The Prudential Regulation of Banks" is an influential book co-authored by Jean Tirole and Mathias Dewatripont that develops a rigorous economic framework for understanding and designing banking regulation and supervision.
-
B.
A Theory of Incentives in Procurement and Regulation (with Jean-Jacques Laffont)
A Theory of Incentives in Procurement and Regulation is a foundational economics book that develops a rigorous principal–agent framework for designing optimal contracts and regulatory mechanisms in public procurement and regulated industries.
-
C.
Rules, Discretion, and Reputation in a Model of Monetary Policy
"Rules, Discretion, and Reputation in a Model of Monetary Policy" is an influential economic paper that analyzes how different monetary policy regimes and the credibility of policymakers affect inflation and output outcomes.
-
D.
Risk, Ambiguity and the Savage Axioms
"Risk, Ambiguity and the Savage Axioms" is a seminal 1961 paper by Daniel Ellsberg that challenges expected utility theory by demonstrating how people systematically prefer known risks over ambiguous ones, a phenomenon now known as the Ellsberg paradox.
-
E.
Beyond the Invisible Hand
Beyond the Invisible Hand is a book by economist Kaushik Basu that critically examines free-market ideology and argues for a more ethically grounded and institutionally aware approach to economics.
- F. None of above. chosen
- G. Unsure - the case is ambiguous/there is not enough information to decide.
NED2
Entity disambiguation (via description)
gpt-5-mini-2025-08-07
Target entity: Moral Hazard and Observability Target entity description: "Moral Hazard and Observability" is a seminal economic paper by Bengt Holmström that develops the theory of optimal incentive contracts under conditions of hidden actions and imperfect information.
-
A.
The Prudential Regulation of Banks (with Mathias Dewatripont)
"The Prudential Regulation of Banks" is an influential book co-authored by Jean Tirole and Mathias Dewatripont that develops a rigorous economic framework for understanding and designing banking regulation and supervision.
-
B.
A Theory of Incentives in Procurement and Regulation (with Jean-Jacques Laffont)
A Theory of Incentives in Procurement and Regulation is a foundational economics book that develops a rigorous principal–agent framework for designing optimal contracts and regulatory mechanisms in public procurement and regulated industries.
-
C.
Rules, Discretion, and Reputation in a Model of Monetary Policy
"Rules, Discretion, and Reputation in a Model of Monetary Policy" is an influential economic paper that analyzes how different monetary policy regimes and the credibility of policymakers affect inflation and output outcomes.
-
D.
Risk, Ambiguity and the Savage Axioms
"Risk, Ambiguity and the Savage Axioms" is a seminal 1961 paper by Daniel Ellsberg that challenges expected utility theory by demonstrating how people systematically prefer known risks over ambiguous ones, a phenomenon now known as the Ellsberg paradox.
-
E.
Beyond the Invisible Hand
Beyond the Invisible Hand is a book by economist Kaushik Basu that critically examines free-market ideology and argues for a more ethically grounded and institutionally aware approach to economics.
- F. None of above. chosen
Statements (41)
| Predicate | Object |
|---|---|
| instanceOf |
academic paper
ⓘ
economics paper ⓘ |
| analyzes | trade-off between incentives and insurance ⓘ |
| assumes |
risk-averse agent
ⓘ
risk-neutral principal ⓘ unobservable effort ⓘ |
| author |
Bengt Holmström
ⓘ
linked to:
Bengt Robert Holmström
|
| citationStatus | highly cited ⓘ |
| contributedTo | Nobel Prize recognition of Bengt Holmström ⓘ |
| countryOfPublication |
United States
ⓘ
linked to:
United States of America
|
| develops |
formal model of hidden action
ⓘ
optimal contract under moral hazard ⓘ |
| field |
contract theory
ⓘ
information economics ⓘ microeconomics ⓘ |
| hasKeyConcept |
incentive–insurance trade-off
ⓘ
informativeness principle ⓘ outcome-contingent pay ⓘ second-best optimality under moral hazard ⓘ |
| influenced |
corporate governance research
ⓘ
executive compensation theory ⓘ labor contract design ⓘ modern contract theory ⓘ principal–agent modeling in finance ⓘ theory of optimal incentive schemes ⓘ |
| language | English ⓘ |
| publicationYear | 1979 ⓘ |
| publishedIn | The Bell Journal of Economics ⓘ |
| publisher |
The RAND Corporation
ⓘ
linked to:
RAND Corporation
|
| shows |
agent’s compensation should depend on observable outcomes
ⓘ
optimal contract is second-best under hidden action ⓘ stronger incentives reduce risk sharing ⓘ |
| topic |
hidden action
ⓘ
imperfect information ⓘ incentive contracts ⓘ moral hazard ⓘ performance-based compensation ⓘ principal–agent problem ⓘ risk sharing ⓘ |
| usesMethod |
constrained optimization
ⓘ
principal–agent model ⓘ |
How these facts were elicited
The pipeline generated the facts above by prompting gpt-5.1 with this entity's name + description and the instruction below.
Instruction
You are a knowledge base construction expert. Given a subject entity and a description of it, return factual statements that you know for the subject as a JSON list of dictionaries(triples), where keys must be "subject", "predicate" and "object". The number of facts may be very high, between 25 to 50 or more, for very popular subjects. For less popular subjects, the number of facts can be very low, like 5 or 10. # Requirements - If you don't know the subject at all, return an empty list. - If the subject is not a named entity, return an empty list. - Include at least one triple where predicate is "instanceOf". - Do not get too wordy. - Separate several objects into multiple triples with one object.
Input
Subject: Moral Hazard and Observability Description of subject: "Moral Hazard and Observability" is a seminal economic paper by Bengt Holmström that develops the theory of optimal incentive contracts under conditions of hidden actions and imperfect information.
Referenced by (2)
Full triples — surface form annotated when it differs from this entity's canonical label.
subject linked to:
Bengt Holmström (studies, later MIT)
linked to: Moral Hazard and Observability