We extend the framework of Dubey and Geanakoplos (2002) to the case of moral hazard. We analyze the equilibrium properties of the model and we show that equal ex-ante consumers may choose to promise differently, and, as a consequence, choose different actions. This illustrates how the pool of...

Career concerns can mitigate moral hazard problems, but these diminish as the agent's retirement age approaches. Addressing this problem, this note draws attention to the role of the interaction between contractible and non-contractible signals.

In the research works, moral hazard is usually represented in two natural states (accident and no accident). In this case, the determination of the optimal contract could be made graphically. The mathematicaing is become more complicated when we consider infinite natural states and efforts under...

Using a moral hazard framework with limited liability with discrete effort levels we show that status incentives help in partially reducing the burden on monetary incentives. Yet, the disutility accruing from failure to achieve status dampens the efficiency of status as an incentive. The optimal...

In this paper we show that differential commodity taxation is superfluous in an economy with moral hazard and separable preferences.

In this paper we solve a parametric moral hazard model that incorporates risk and inequity aversion. In the model, the worker's effort is not contractible but the employer can link the worker's compensation to the revenue, a measure probabilistically related to the effort. The model can account...

This note develops a dynamic model of crime that determines the conditions under which it is optimal for a criminal to delay commission of a crime rather than committing it immediately. It also examines the optimal enforcement strategy in this context. We derive two results. The first is that it...

We analyze the impact of policing and socio-economic variables on crime in England and Wales during 1992-2007 using the quantile regression model which enables us to analyze different points of the crime distribution. The quantile regression model allows us to analyze whether or not the factors...

This paper uses recently unveiled monthly information from the Hellenic Ministry of Finance on tax audits targeted to large enterprises, high wealth individuals and VAT non-filers and finds evidence that an increase in the number of audits can boost revenue performance. A 1 percent increase in...

This article aims at studying the impact of return on education on criminal behaviour. A dynamic model of time allocation between investment in human capital, labour and criminal activity is developed, assuming that these activities are substitutable and endogenous. Our attention focuses on the...