Contracting with moral hazard, adverse selection and risk neutrality: when does one size fit all?

摘要: This paper studies a principal-agent relationship when both are risk-neutral and in the presence of adverse selection moral hazard. Contracts must satisfy limited-liability monotonicity conditions. We provide sufficient conditions under which optimal contract is simple, sense that each type offered same contract. These are: action agent’s complements, output’s cumulative distribution function such marginal rate substitution between for possible output realization. Furthermore, average monotone likelihood ratio property, call-option as Innes (J Econ Theory 52(1):45–67, 1990). The results shed light on fact sometimes contracts not highly dependent individual characteristics predicted most pure hazard settings.