This paper examines the effect of imperfect labor market competition on the efficiency of compensation schemes in a setting with moral hazard and risk-averse agents, who have private information on their productivity. Two vertically differentiated firms compete for agents by offering contracts...

We analyze the impact of social comparison on optimal contract design under imperfect labor market competition for managerial talent. Adding a disutility of social comparison as induced by a ranking of verifiable efforts to the multi-task model by Bénabou and Tirole (2016), we demonstrate that...

We analyze a principal agent model with hidden action, limited liability and truth-telling constraints under the assumption that the principal has private information. We focus on whether the principal should reveal his private information to the agent. On the one hand, revelation allows to...

We analyze a model of delegated expertise with limited liability where both the agent's effort and his findings are unobservable. We show that the latter assumption reduces the agent's effort and the principal's profit in the unique subgame perfect equilibrium. Most interestingly, the...

We derive the optimal contract in a model in which the agent's effort is unobservable and his findings are private information. Our focus is on the impact of the agent's wealth constraint. We show that three regions need to be distinguished: if the agent's wealth is above a critical threshold,...