Attanasio, Orazio; Pavoni, Nicola - Society for Economic Dynamics - SED - 2004
income. In this paper, we show how a model with imperfect risk sharing because of moral hazard can reconcile these facts. In … contracting: We consider the hidden income (adverse selection) model and the action moral hazard framework. When asset … borrowing and lending. Abraham and Pavoni (2004) (AP) in contrast show that in the action moral hazard model the efficient …