crucial novel feature is the competition between lenders in their choice of contracts offered. The quality of investment … distribute themselves across all offered contracts. Competition between banks introduces three possibilities for a breakdown of … lenders, which may make lending altogether unprofitable. Second, banks can have an incentive to offer a debt contract and …

This paper analyzes the impact of labor market competition and skill-biased technical change on the structure of … compensation. The model combines multitasking and screening, embedded into a Hotelling-like framework. Competition for the most … perfect competition, the resulting efficiency loss can be larger than that imposed by a single firm or principal, who distorts …

We consider a simple model of competition under moral hazard with constant return technologies. We consider preferences …-income levels. We show that, in this context, Bertrand competition may result in positive equilibrium profit. This result holds for … purely idiosyncratic shocks when only deterministic contracts are considered, and extends to unrestricted contract spaces in …

The paper shows that an increase in competition has two effects on managerial incentives: it increases the probability … where increased competition unambiguously reduces managerial slack. In general, however, this relation need not be monotonic … enter the market, but will eventually decrease when competition becomes too intense. …

We study the effects of reputation and competition in a stylized market for experience goods. If interaction is …, we find that competition, coupled with some minimal information, eliminates the trust problem almost completely. …

riskiness of the portfolio. This represents a departure from the existing literature on agency theory in that moral hazard is … conditions, there exists a first-best contract which takes the form of a bonus contract. In the latter, we show that there exists … no first-best contract and we use a numerical approximation to study the properties of the second-best contract …

In the 'Knightian' theory of entrepreneurship, entrepreneurs provide insurance to workers by paying fixed wages and …