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We study a credence goods problem - that is, a moral hazard problem with non-contractible outcome - where altruistic experts (the agents) care both about their income and the utility of consumers (the principals). Experts' preferences over income and their consumers' utility are convex, such...
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decision. A government may tax the sin good and provide mandatory health insurance. Due to time-inconsistency, the individual … sin good and savings choices in ict internalities. Due to the ex-ante moral hazard of health insurance, sin good …- pled, the government can achieve the first-best outcome using a uniform tax rate and uniform health insurance. Moreover, in …
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