The Virtue of Being Underestimated : A Note on Discriminatory Contracts in Hidden Information Models

@inproceedings{Schnedler2001TheVO,
  title={The Virtue of Being Underestimated : A Note on Discriminatory Contracts in Hidden Information Models},
  author={Wendelin Schnedler},
  year={2001}
}
  • Wendelin Schnedler
  • Published 2001
A standard hidden information model is considered to study the influence of the a priori productivity distribution on the optimal contract. A priori more productive (hazard rate dominant) agents work less, enjoy lower rents, but generate a higher expected surplus. JEL Classification: D82 J71 keywords: adverse selection, statistical discrimination… CONTINUE READING

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