We present a continuous-time contracting model under moral hazard with many agents. The principal contracts many agents as a team, and they jointly produce correlated outcomes. We show the optimal contract for each agent is linear in outcomes of all other agents as well as his/her own. The...

We present a market microstructure model to examine specialist's strategic participation decisions in a security market where there are noise traders, limit order traders, an insider and a specialist. We argue that the specialist's participation rate depends on the depth of the limit book and...

We present an agency model to examine the use of corporate insurance by publicly held firms. We assume that insurance companies serve two functions: providing risk-management consulting services and verifying whether accidents were insured or not. The verification results can be used to produce...

This article presents a continuous-time agency model in the presence of adverse selection and moral hazard with a risk-averse agent and a risk-neutral principal. Under the model setup, we show that the optimal controls are constant over time, and thus the optimal menu consists of contracts that...

I extend Holmstrom and Milgrom's model by allowing the agent to control privately or publicly the diffusion-rate process, and show that the optimal contract is still linear. I discuss the conditions under which conflicts over the choice of diffusion rate do and do not arise. As an application, I...