The existing delegation literature has focused on different preferences of principal and agent concerning project selection, which makes delegating authority costly for the principal. This paper shows that delegation has a cost even when the preferences of principal and agent are exogenously...

We show that contracting in agency with voluntary participation may involve incentives for the agent's abstention. Their provision alters the optimality criteria in the principal's decision-making, further distorts the mechanism, and may lead to breakdown of contracting in circumstances where...

Consider an agent who can costlessly add mean-preserving noise to his output. To deter such risk-taking, the principal optimally offers a contract that makes the agent's utility concave in output. If the agent is risk-neutral and protected by limited liability, this concavity constraint binds...

We consider a three-player Bayesian persuasion game in which the sender designs a signal about an unknown state of the world, the agent exerts a private effort that determines the distribution of the underlying state, and the receiver takes an action after observing the signal and its...

Traditionally insurance agents are incentivised by payment of a commission on the premium they generate. A bonus payment received by the agent from the insurer, when the insured does not make a claim, is referred to as ‘No claim bonus' (NCB). NCB rewards the agent for her / his effort in...

We consider multiple-principal multiple-agent models of moral hazard: Principals compete through mechanisms in the presence of agents who take unobservable actions. In this context, we provide a rationale for restricting principals to make use of simple mechanisms, which correspond to direct...

Wir analysieren die Entscheidungssituation eines Jungunternehmers, der die Nachfolge eines mittelständischen Altunternehmers als Eigentümer und Geschäftsführer antreten möchte. Zu diesem Zweck unterbreitet der Jungunternehmer dem Senior ein Übernahmeangebot, wobei der Jungunternehmer...

We show that concerns for fairness may have dramatic consequences for the optimal provision of incentives in a moral hazard context. Incentive contracts that are optimal when there are only selfish actors become inferior when some agents are concerned about fairness. Conversely, contracts that...