Demougin, Dominique; Fluet, Claude; Helm, Carsten - Centre Interuniversitaire de Recherche en Analyse des … - 2004
We analyze a two-task work environment with risk-neutral but inequality averse individuals. For the agent employed in … his wealth constraint, leads to a rent that the other agent resents. We show that inequality aversion affects the optimal … contracts of both agents. Greater inequality aversion reduces the effort, wage and payoff of agent 1, while the effects on the …