We formulate and solve the problem of optimal mechanism-design by a principal facing adverse selection and moral hazard from different sources. The parties' decision problem is comprised of a publicly observable collective choice and a partially private social choice. As in agency with pure...

I explore the theoretical properties of earnings, prices, and compensation contracts under the assumption that strategic managers are evaluated based on audited financial reports of their own making. If auditors require managers to provide verifiable evidence substantiating the contents of their...

This paper studies a moral hazard problem in which the principal can ex ante commit to an information disclosure policy to control the agent’s monetary incentives. The outcome depends on the unverifiable state of nature, in addition to the agent’s effort choice. I characterize the...