The authors study the design of supervisory functions in an organization with one principal and two agents. Each agent can perform supervision activities regarding the other agent. They characterize the way the principal must structure incentive payments to avoid any collusive activity between...

In this paper, the authors suggest a way in which a monopolistic insurance firm can improve segmentation of its market by conditioning the price of insurance on the quantity of risky assets held by its clients. They derive the optimal linear pricing scheme and show that the firm's profit...