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

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Author Info
Wendelin Schnedler

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Abstract

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.

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File URL: ftp://web.bgse.uni-bonn.de/pub/RePEc/bon/bonedp/bgse18_2001.pdf
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Publisher Info
Paper provided by University of Bonn, Germany in its series Bonn Econ Discussion Papers with number bgse18_2001.

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Length: 8
Date of creation: Jun 2001
Date of revision:
Handle: RePEc:bon:bonedp:bgse18_2001

Contact details of provider:
Postal: Bonn Graduate School of Economics, University of Bonn, Adenauerallee 24 - 26, 53113 Bonn, Germany
Fax: +49 228 73 9221
Web page: http://www.bgse.uni-bonn.de/index.php?id=494

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Related research
Keywords: adverse selection; statistical discrimination; stochastic order relation;

Other versions of this item:

Find related papers by JEL classification:
D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information
J71 - Labor and Demographic Economics - - Labor Discrimination - - - Hiring and Firing

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This page was last updated on 2009-12-21.


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