A model intervenes: the many faces of moral hazard

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Latsis, John and Repapis, Constantinos. 2014. A model intervenes: the many faces of moral hazard. Cambridge Journal of Economics, 38(4), pp. 743-760. ISSN 0309-166X [Article]

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Official URL: http://cje.oxfordjournals.org/content/38/4/743.abs...

Abstract or Description

This article builds on advances in social ontology to develop a new understanding of how mainstream economic modelling affects reality. We propose a new framework for analysing and describing how models intervene in the social sphere. This framework allows us to identify and articulate three key epistemic features of models as interventions: specificity, portability and formal precision. The second part of the article uses our framework to demonstrate how specificity, portability and formal precision explain the use of moral hazard models in a variety of different policy contexts, including worker compensation schemes, bank regulation and the euro-sovereign debt crisis.

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Article

Identification Number (DOI):

https://doi.org/10.1093/cje/bet069