Labor Contracts With Two-Dimensional Adverse Selection

We study incentive-compatible labor contracts in the case where both individual productivity and subjective discount rate are unobservable by the rm. We rst show that unidimensional manifolds of agents group on the same contract. High , low agents may choose the same contract as low , high agents. We show existence and uniqueness of an optimal wage function which is continuous and unbounded. This optimal wage function can be determined by the ironing procedure.

MoreLess

Year of publication:	2000
Authors:	Carlier, Guillaume ; Gaumont, Damien
Institutions:	Université Paris-Dauphine (Paris IX)
Subject:	Adverse Selection \| Incentive-Compatible Contracts \| Ironing Procedure \| Heterogeneous Time Preference

More details

Extent:	application/postscript application/pdf
Series:	Economics Papers from University Paris Dauphine.
Type of publication:	Book / Working Paper
Notes:	Published in Cahiers du CEREMADE, 2000
Classification:	C61 - Optimization Techniques; Programming Models; Dynamic Analysis ; C62 - Existence and Stability Conditions of Equilibrium ; D82 - Asymmetric and Private Information ; J31 - Wage Level and Structure; Wage Differentials by Skill, Training, Occupation, etc
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10010706876