Hostname: page-component-78c5997874-t5tsf Total loading time: 0 Render date: 2024-11-15T05:52:33.356Z Has data issue: false hasContentIssue false
  • English
  • Français

Financial Intermediation and the Theory of Agency

Published online by Cambridge University Press:  06 April 2009

Dennis W. Draper  and
James W. Hoag
Get access Rights & Permissions [Opens in a new window]

Extract

Intermediation, and in particular financial intermediation, is a frequently observed class of activities for which the literature provides little definition. Although intermediaries exist in major proportions of the economy, a precise characterization of an intermediary's function has not appeared. Rather, the academic and pragmatic literature refer to intermediaries by example, generally agreeing that such institutions as banks, insurance companies, etc., are intermediaries. This research addresses the issue of what an intermediary is; that is, what distinguishes the activity of intermediation from other economic activity.

Type
I. Presidential Session
Information
Journal of Financial and Quantitative Analysis , Volume 13 , Issue 4 , November 1978 , pp. 595 - 611
Copyright
Copyright © School of Business Administration, University of Washington 1978

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

REFERENCES

[1]Akerlof, George A. “The Market for ‘Lemons’: Qualitative Uncertainty and the Market Mechanisms.” Quarterly Journal of Economics, Vol. 39 (08 1970), pp. 488–500.CrossRefGoogle Scholar
[2]Alchian, A., and Demsetz, H.. “Production, Information Costs, and Economic Organization.” American Economic Review (12 1972).Google Scholar
[3]Arrow, K. “Uncertainty and the Welfare Economics of Medical Care.” American Economic Review, Vol. 53 (1963).Google Scholar
[4]Draper, Dennis. “On the Existence of Malpractice Contracts-A Choice Theoretic Approach.” Working Paper (1978).Google Scholar
[5]Draper, Dennis, and Hoag, James. “Financial Intermediation and the Theory of Agency.” Working Paper (1978).CrossRefGoogle Scholar
[6]Harris, M., and Raviv, A.. “Optimal Incentive Contracts with Imperfect Information.” Working Paper No. 70–75–76, GSIA, Carnegie-Mellon University (1976).Google Scholar
[7]Holmstrom, Bengt. “On Incentives and Control in Organizations.” Unpublished Ph.D. dissertation, Stanford University (1977).Google Scholar
[8]Leland, Hayne, and Pyle, D. H.. “Informational Asymmetries, Financial Structure, and Financial Intermediation.” Research Program in Finance, Working Paper No. 41, Institute of Business and Economic Research, University of California, Berkeley (03 1976).Google Scholar
[9]Mirrlees, J. A. “Notes on Welfare Economics, Information and Uncertainty.” In Essays on Economic Behavior under Uncertainty: Contributions to Economic Analysis. Edited by Balch, M. S., McFadden, D. L., and Wu, S. Y.. Oxford and Amsterdam: North Holland Publishing Company (1974).Google Scholar
[10]Mirrlees, J. A. “The Optimal Structure of Incentives and Authority within an Organization.” The Bell Journal of Economics (Spring 1976).CrossRefGoogle Scholar
[11]Radner, R. “Competitive Equilibrium under Uncertainty.” Econometrica, Vol. 36 (1968), pp. 31–58.CrossRefGoogle Scholar
[12]Riley, John G. “Competitive Screening.” Journal of Economic Theory, Vol. 10 (04 1975), pp. 174–186.CrossRefGoogle Scholar
[13]Riley, John G. “Informational Equilibrium.” Rand Corporation Working Paper (04 1977).Google Scholar
[14]Ross, Stephen A. “The Determination of Financial Structure: The Incentive-Signalling Approach.” Bell Journal of Economics (Spring 1977).CrossRefGoogle Scholar
[15]Rothchild, M., and Stiglitz, J. E.. “Equilibrium in Competitive Insurance Markets: An Essay on the Economics of Imperfect Information.” Quarterly Journal of Economics, Vol. 90 (11 1976), pp. 629–649.CrossRefGoogle Scholar
[16]Rubinstein, M. “The Valuation of Uncertain Income Streams and the Pricing of Options.” Bell Journal of Economics (Autumn 1976).CrossRefGoogle Scholar
[17]Spence, A. M. “Job Market Signalling.” Quarterly Journal of Economics (08 1973).CrossRefGoogle Scholar
[18]Spence, A. M.Market Signalling: Information Transfer in Hiring and Related Processes. Cambridge, Mass.: Harvard University Press (1973).Google Scholar
[19]Spence, A. M., and Zeckhauser, R.. “Insurance, Information and Individual Action.” American Economic Review, Vol. 61, No. 2 (05 1971), pp. 380–382.Google Scholar
[20]Stiglitz, J. E. “Incentives and Risk Sharing in Sharecropping.” Review of Economic Studies (04 1974).CrossRefGoogle Scholar