We analyze how the agent's initial wealth affects the principal's expected profits in the standard principal–agent model with moral hazard.

In their seminal paper on the principal-agent model with moral hazard, Grossman and Hart (1983) show that if the agent's utility function is $U(I,a)=-e^{-k(I-a)}$, then the loss to the principal from being unable to observe the agent's action is increasing in the agent's degree of absolute risk...

This paper analyzes a principal-agent problem with moral hazard where a principal searches for an opportunity of uncertain return, and hires an agent to evaluate available options. The agent's effort affects the informativeness of a signal about an option's return. Based on the information...

We define and explore the No-Upward-Crossing NUC, a condition satisfied by every parameterized family of distributions commonly used in economic applications. Under smoothness assumptions, NUC is equivalent to log-supermodularity of the negative of the derivative of the distribution with respect...