Risk-bearing and entrepreneurship

• 成果类型: Article
• 署名作者: Newman, Andrew F.
• 署名单位: Boston University
• 刊物名称: JOURNAL OF ECONOMIC THEORY
• ISSN/ISSBN: 0022-0531
• DOI: 10.1016/j.jet.2007.03.004
• 发表日期: 2007
• 页码: 11-26
• 关键词: Moral hazard; occupational choice; principal-agent model

摘要

In the Knightian theory of entrepreneurship, entrepreneurs provide insurance to workers by paying fixed wages and bear all the risk of production. This paper endogenizes entrepreneurial risk by allowing for optimal insurance contracts as well as occupational self-selection. Moral hazard prevents full insurance; increases in an agent's wealth then entail increases in risk borne. Thus, even under decreasing risk aversion, there are robust instances in which workers are wealthier than entrepreneurs. This empirically implausible result suggests that risk-based explanations for entrepreneurship are inadequate. (c) 2007 Elsevier Inc. All rights reserved.