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

This paper studies the optimal risk-sharing between an insurer and a reinsurer. The insurer purchases reinsurance for … risk-control and decides her retention level with an objective to minimize her ruin probability. The reinsurer has control … specify the reinsurance contract by solving a system of coupled Hamilton-Jacobi-Bellman equations. We obtain explicit …