Compensation Disparity between Risk Averse Agents under Adverse Selection and Moral Hazard

• 발행기관: 한국계량경제학회
• 저자명: Sung Hyun Kim
• 간행물 정보: 『JOURNAL OF ECONOMIC THEORY AND ECONOMETRICS』Vol.32 No.2, 74~91쪽, 전체 18쪽
• 주제분류: 경제경영 > 경제학
• 파일형태: PDF
• 발행일자: 2021.06.30

영문 초록

We extend the LEN moral hazard model to allow for adverse selection and derive the optimal incentive contract menu. We show that both moral hazard and adverse selection separately cause compensation disparity between agents with different degrees of risk aversion. We also show that adverse selection aggravates the compensation disparity when more risk averse agents form a minority of the agent population.

목차

1. INTRODUCTION

2. THE MODEL

3. THE OPTIMAL CONTRACT

4. ANALYSIS OF THE OPTIMAL CONTRACT AND COMPENSATION

5. DISCUSSION AND CONCLUDING REMARKS

키워드

Incentive Contract Pay Gap LEN Model