Bose, Arup; Pal, Debashis; Sappington, David E.M. - In: Oxford Economic Papers 63 (2011) 1, pp. 94-110
This paper considers a simple moral hazard setting in which a project owner (or, more generally, a principal) hires a contractor (or, more generally, an agent) to operate her project. We show that a systematic increase in the agent's operating costs can increase either the principal's profit or...
