We present a model of delegation with moral hazard. A principal delegates a decision to an agent, who affects the … economic environments. Optimal delegation takes one of four simple forms, all commonly used in practice: floors, ceilings …

The author analyses delegation in homogenous duopoly under the assumption that firm-managers compete in supply … functions. He reverses earlier findings in that owners give managers incentives to act in an accommodating way. That is, optimal … delegation reduces per-firm output and increases profits to above-Cournot profits. Moreover, in supply function equilibrium, the …

– to minimize the conflict between income insurance and work incentives and to prevent the economic crisis from causing a …