BANERJEE, TANMOYEE; RAYCHAUDHURI, AJITAVA - In: The Singapore Economic Review (SER) 56 (2011) 01, pp. 113-144
In a principal-agent framework under moral hazard, when the monopolist can pass on the liability of any defect of the product to the subcontractors, and cannot credibly commit to a high level of investment, he actually chooses a low investment level and supplies a low quality product if the...