Homework: Dealing with Risk, Asymmetric Information and Incentives
Earlier in the quarter, we discussed Southwest Airlines' use of game theory to create a new strategy. Continue to research Southwest Airlines or a company of your choice and write a 5 to 7 pages paper in which you:
• Evaluate a company's recent (within the last year) actions dealing with risk and uncertainty.
• Offer advice for improving risk management.
• Examine an adverse selection problem your company is facing and recommend how it should minimize its negative impact on transactions.
• Determine the ways your company is dealing with the moral hazard problem and suggest best practices used in the industry to deal with it.
• Identify a principal-agent problem in your company and evaluate the tools it uses to align incentives and improve profitability.
• Examine the organizational structure of your company and suggests ways it can be changed to improve the overall profitability.
Format your homework according to the give formatting requirements:
• The answer must be using Times New Roman font (size 12), double spaced, typed, with one-inch margins on all sides.
• The response also includes a cover page containing the student's name, the title of the homework, the course title, and the date. The cover page is not included in the required page length.
• Also include a reference page. The references and Citations should follow APA format. The reference page is not included in the required page length.