Optimal contracts under competition when uncertainty from adverse selection and moral hazard are present

N. Packham

Papers from arXiv.org

Abstract: In a continuous-time setting where a risk-averse agent controls the drift of an output process driven by a Brownian motion, optimal contracts are linear in the terminal output; this result is well-known in a setting with moral hazard and -under stronger assumptions - adverse selection. We show that this result continues to hold when in addition reservation utilities are type-dependent. This type of problem occurs in the study of optimal compensation problems involving competing principals.

Date: 2018-01
New Economics Papers: this item is included in nep-cta, nep-hrm, nep-mic and nep-upt
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Citations: View citations in EconPapers (2)

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