Bose, Arup; Pal, Debashis; Sappington, David E.M. - In: Economics Letters 107 (2010) 3, pp. 330-332
We characterize the optimal piece-rate contract in the canonical moral hazard setting with a wealth-constrained, risk averse agent. The contract is shown to have a simple, intuitive characterization in a structured, but broad, class of settings.