Economics at your fingertips  

Adverse Selection in Dynamic Moral Hazard

Ching-to Ma ()

The Quarterly Journal of Economics, 1991, vol. 106, issue 1, 255-275

Abstract: This paper studies a multiperiod moral hazard problem under two assumptions: (i) contracts are subject to renegotiations; (ii) the agent's action has long-term effects. The action is also interpreted as a choice of characteristic or "type." Renegotiation-proof contracts that implement various actions, including random ones, are characterized. Under appropriate conditions, the equilibrium involves the principal implementing a random action. Therefore, the equilibrium has standard properties of "adverse selection" models.

Date: 1991
References: Add references at CitEc
Citations: View citations in EconPapers (27) Track citations by RSS feed

Downloads: (external link) (application/pdf)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

Access Statistics for this article

The Quarterly Journal of Economics is currently edited by Robert J. Barro, Elhanan Helpman, Lawrence F. Katz and Andrei Schleifer

More articles in The Quarterly Journal of Economics from Oxford University Press
Bibliographic data for series maintained by Oxford University Press (). This e-mail address is bad, please contact .

Page updated 2019-10-04
Handle: RePEc:oup:qjecon:v:106:y:1991:i:1:p:255-275.