We analyze the problem of a seller who has multiple units of a good and faces a set of buyers with unit demands, private information, and identity-dependent externalities. We derive the seller's optimal mechanism and characterize its main properties. As an application of the model, we consider...

This paper considers an infinite-horizon principal-agent model with moral hazard. Following the insights of Grossman and Hart (1983) and the methodology of recursive contracts we are able to establish properties of the optimal dynamic contract analytically. We solve the contracting problem...