Simple contracts with adverse selection and moral hazard

• 成果类型: Article
• 署名作者: Gottlieb, Daniel; Moreira, Humberto
• 署名单位: University of London; London School Economics & Political Science; Getulio Vargas Foundation
• 刊物名称: THEORETICAL ECONOMICS
• ISSN/ISSBN: 1933-6837
• DOI: 10.3982/TE2992
• 发表日期: 2022-07-01
• 页码: 1357-1401
• 关键词: Principal-agent problem; contract theory; mechanism design; D82; D86

摘要

We study a principal-agent model with moral hazard and adverse selection. Risk-neutral agents with limited liability have arbitrary private information about the distribution of outputs and the cost of effort. We show that under a multiplicative separability condition, the optimal mechanism offers a single contract. This condition holds, for example, when output is binary. If the principal's payoff must also satisfy free disposal and the distribution of outputs has the monotone likelihood ratio property, the mechanism offers a single debt contract. Our results generalize if the output distribution is close to multiplicatively separable. Our model suggests that offering a single contract may be optimal in environments with adverse selection and moral hazard when agents are risk-neutral and have limited liability.