
KCI등재
학술저널
Compensation Disparity between Risk Averse Agents under Adverse Selection and Moral Hazard
- Sung Hyun Kim
- 한국계량경제학회
- JOURNAL OF ECONOMIC THEORY AND ECONOMETRICS
- Vol.32 No.2
- 등재여부 : KCI등재
- 2021.06
- 74 - 91 (18 pages)
We extend the LEN moral hazard model to allow for adverse selection and derive the optimal incentive contract menu. We show that both moral hazard and adverse selection separately cause compensation disparity between agents with different degrees of risk aversion. We also show that adverse selection aggravates the compensation disparity when more risk averse agents form a minority of the agent population.
1. INTRODUCTION
2. THE MODEL
3. THE OPTIMAL CONTRACT
4. ANALYSIS OF THE OPTIMAL CONTRACT AND COMPENSATION
5. DISCUSSION AND CONCLUDING REMARKS