Existence and Characterization of Optimal Employment Contracts on a Continuous State Space

Charles M. Kahn

Research output: Contribution to journalArticlepeer-review

Abstract

This paper characterizes the class of incentive compatible contracts and establishes existence and absolute continuity of an optimal wage-employment contract in an environment where private information can take on a continuum of values. Unlike previous work on optimal contracting, our results use neither an assumption that utility is additively separable in income and leisure nor prior assumptions of continuity or differentiability of the contract. Journal of Economic Literature Classification Numbers: D82, C61, J41.

Original languageEnglish (US)
Pages (from-to)122-144
Number of pages23
JournalJournal of Economic Theory
Volume59
Issue number1
DOIs
StatePublished - Feb 1993

ASJC Scopus subject areas

  • Economics and Econometrics

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