Participation in moral hazard problems

@article{Roger2016ParticipationIM,
  title={Participation in moral hazard problems},
  author={Guillaume Roger},
  journal={Games and Economic Behavior},
  year={2016},
  volume={95},
  pages={10-24}
}
Two principals engage in Hotelling competition for an agent's services under incomplete information as to her outside option (location). This renders the agent's participation decision probabilistic from the perspective of each principal. Regardless of the market structure at equilibrium the optimal contract features a trade-off between participation… CONTINUE READING