We study market inefficiencies and policy remedies when agents choose their occupations, and entrepreneurialtalent is subject to private information. Untalented entrepreneurs depress the returns to entrepreneurshipbecause of adverse selection. The severity of this problem depends on the outside...

We study an overlapping generations version of the principal-agent problem, where incentive contracts are determined in general equilibrium. All individuals are workers when young, but have a choice between becoming entrepreneurs or remaining workers when old. Imperfections in the credit market...

We study an overlapping generations version of the principal-agent problem, where incentive contracts are determined in general equilibrium. All individuals are workers when young, but have a choice between becoming entrepreneurs or remaining workers when old. Imperfections in the credit market...

This paper introduces a general equilibrium, overlapping generations model of the principal- agent problem. Bargaining power, occupational choice, and the returns to each occupation are endogenous. Individuals live for two periods and must work when young. When old, they have a choice between...