Joan Enric Ricart i Costa

On managerial contracting with asymmetric information

Abstract This paper deals with asymmetric information in a two-period principal-agent model where the agent makes investment decisions after observing a private signal. We study the case where the current employer has more information than other prospect employers and the case where the private information is not verifiable by the current employer. We analyze the effect of these asymmetries on the wage contracts as well as their interplay.