Existence and monotonicity of solutions to moral hazard problems.

This paper provides a method to prove existence of solutions to some moral hazard problems with infinite set of outcomes. The argument is based on the concept of nondecreasing rearrangement and on a supermodular version of Hardy–Littlewood’s inequality. The method also provides qualitative properties of solutions. Both the cases of wage contracts and of insurance contracts are studied.

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Year of publication:	2005
Authors:	Carlier, Guillaume ; Dana, Rose-Anne
Institutions:	Université Paris-Dauphine
Subject:	Supermodularity \| Rearrangements \| First-order approach \| Moral hazard

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Extent:	application/pdf
Series:	Open Access publications from Université Paris-Dauphine.
Type of publication:	Book / Working Paper
Language:	English
Notes:	Published in Journal of Mathematical Economics (2005) v.41, p.826-843
Classification:	J41 - Contracts: Specific Human Capital, Matching Models, Efficiency Wage Models, and Internal Labor Markets ; G22 - Insurance; Insurance Companies ; C44 - Statistical Decision Theory; Operations Research
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10008783683