Publication detail

Application of the Decision Tree Method on the Moral Hazard

FOJTŮ, K.

Original Title

Application of the Decision Tree Method on the Moral Hazard

Type

conference paper

Language

English

Original Abstract

Asymmetric information is an issue with which deal each manager. Sometimes each manager face the situation when he/she has more information than the shareholders. Some information could cause that the shareholders could leave the company and it could cause this company big problems. In this situation the manager has to decide it he/she share this information with shareholders or if he/she does not share and will try to solve that problem before someone find out. If the manager is does not share particular information he/she has to know that there could be some consequences – losing job, paying penalties or being suit. This article studies decision making of one manager and how he deals with the situation when he has to decide if he reveals all information or not. This whole situation was described in the case study and decision-making task was graphically illustrated by a decision tree. This decision tree is solved for fictitious manager in one firm. This fictitious manager deals with a problem, if he conceals important information or not. His decision was solved with decision tree method and the solutions of his situation is, that he should not conceal any information because of consequences.

Keywords

moral hazard, asymmetric information, decision tree, decision making

Authors

FOJTŮ, K.

RIV year

2015

Released

8. 5. 2015

ISBN

978-0-9860419-4-5

Book

Innovation Vision 2020: From Regional Development Sustainability to Global Economic Growth

ISBN

NEUVEDENO

Pages from

2622

Pages to

2626

Pages count

5

BibTex

@inproceedings{BUT115111,
  author="Kateřina {Fojtů}",
  title="Application of the Decision Tree Method on the Moral Hazard",
  booktitle="Innovation Vision 2020: From Regional Development Sustainability to Global Economic Growth",
  year="2015",
  pages="2622--2626",
  isbn="978-0-9860419-4-5"
}