We generalize the disutility of effort function in the linear-Constant Absolute Risk Aversion (CARA) puremoral hazardmodel.We assume that agents are heterogeneous in ability. Each agent's ability is observable and treated as a parameter that indexes the disutility of effort associated with the...

We generalize the disutility of effort function in the linear-Constant Absolute Risk Aversion (CARA) puremoral hazardmodel.We assume that agents are heterogeneous in ability. Each agent's ability is observable and treated as a parameter that indexes the disutility of effort associated with the...

We show that in situations of team production, the associated externality between workers can be partially internalized via the delegation of authority of contracting rights, thus improving the overall efficiency of organizations. A delegated structure provides further incentives to individuals...

We show that in situations of team production, the associated externality between workers can be partially internalized via the delegation of authority of contracting rights, thus improving the overall efficiency of organizations. A delegated structure provides further incentives to individuals...

When fairly homogeneous taxpayers are affected by common income shocks, a tax agency’s optimal auditing strategy consists of auditing a low-income declarer with a probability that (weakly) increases with the other taxpayers’ declarations. Such policy generates a coordination game among...