We study the Lemons Problem when workers have private information on both their skills and their intrinsic motivation. When workers are motivated, ine¢ ciencies due to adverse selection are mitigated and a change in salaries may have unexpected consequences. With a su¢ ciently strong and...

We study optimal contracts offered by two firms competing for the exclusive services of one worker, who is privately informed about her ability and her motivation. Firms differ both in their production technology and in the mission they pursue and a motivated worker is keen to be hired by the...

We study the screening problem of a firm that needs to hire a worker to produce output and that observes neither the productive ability nor the intrinsic motivation of the job applicant. We completely characterize the set of optimal contracts according to whether motivation or ability is the...

The paper studies the incentive for providers to invest in new health care technologies under alternative payment systems, when the patients’ benefits are uncertain. If the reimbursement by the purchaser includes both a variable (per patient) and a lump-sum component, efficiency can be ensured...