Existence of pure strategy equilibria is studied in insurance markets that exhibit both ex ante adverse selection of the Rothschild-Stiglitz-Wilson type, and ex post hidden information moral hazard. It is found that ex post moral hazard has two offsetting effects on the existence of equilibrium,...

338: I examine the standard assumption in the moral hazard agency literature that the principal has all the bargaining power at the contract offer stage. When the agent has limited liability, as is often the case in practice, the contract changes according to the distribution of bargaining...