We consider a principal who deals with a privately informed agent protected by limited liability in a correlated information setting. The agent's technology is such that the fixed cost declines with the marginal cost (the type), so that countervailing incentives may arise. We show that, with...

We extend the principal/one-agent model with countervailing incentives to a framework in which the principal deals with two agents behaving non-cooperatively and protected by limited liability. Focusing on the two-type case, we show that, beside the situation in which first best is effected even...

We consider a principal who deals with two privately informed agents protected by limited liability. Their technologies are such that the fixed costs decline with the marginal costs (the types), which are correlated. Because of these technological features, agents display countervailing...