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Title:The Virtue of Being Underestimated: A Note on Discriminatory Contracts in Hidden Information Models PDF Logo
Authors:Schnedler, Wendelin
Issue Date:2001
Series/Report no.:IZA Discussion paper series 342
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.
Subjects:Adverse selection
statistical discrimination
stochastic order relation
Document Type:Working Paper
Appears in Collections:IZA Discussion Papers, Forschungsinstitut zur Zukunft der Arbeit (IZA)

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