haku: @indexterm equilibrium theory / yhteensä: 340
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| Tekijä: | Bennardo, A. Chiappori, P-A. |
| Otsikko: | Bertrand and Walras equilibria under moral hazard |
| Lehti: | Journal of Political Economy
2003 : AUG, VOL. 111:4, p. 785-817 |
| Asiasana: | Competition Equilibrium theory Moral hazard |
| Kieli: | eng |
| Tiivistelmä: | A simple model of competition under moral hazard with constant return technologies is considered in this paper. Preferences that are not separable in effort are considered: marginal utility of income is assumed to increase with leisure, especially for high income levels. It is shown that, in this context, Bertrand competition may result in positive equilibrium profit. This result holds for purely idiosyncratic shocks when only deterministic contracts are considered and extends to unrestricted contract spaces in the presence of aggregate uncertainty. |
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