We solve the principal-agent problem of a monopolist insurer selling to an agent whose riskiness (loss chance) is private information, a problem introduced in Stiglitz's (1977) seminal paper. For an \emph{arbitrary} type distribution, we prove several properties of optimal menus, such as...

This article describes how entrepreneurs face critical risks in terms of quality control and knowledge management while outsourcing software development to independent service providers. First, it is recommended that lump-sum payment contracts should be avoided since software development project...