Assignment: Dealing with Risk, Asymmetric Information, and Incentive
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 six to eight page paper in which you:
1. Evaluate a company's recent (within the last year) actions dealing with risk and uncertainty.
2. Offer advice for improving risk management.
3. Examine an adverse selection problem your company is facing and recommend how it should minimize its negative impact on transactions.
4. Determine the ways your company is dealing with the moral hazard problem and suggest best practices used in the industry to deal with it.
5. Identify a principal-agent problem in your company and evaluate the tools it uses to align incentives and improve profitability.
6. Examine the organizational structure of your company and suggests ways it can be changed to improve the overall profitability.
Format your assignment according to the following formatting requirements:
1. The answer should be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides.
2. The response also includes a cover page containing the title of the assignment, the student's name, the course title, and the date. The cover page is not included in the required page length.
3. Also include a reference page. The Citations and references should follow APA format. The reference page is not included in the required page length.