Class 19: Hidden Action: Moral Hazard and Incentives

Textbook reading: Kreps, Chapter 21, “Hidden Action: Moral Hazard and Incentives.” Read all of it; the Safelite case in 21.1 and the list of complications in 21.3 are the material of Q57. Problems 21.1 and 21.4 are Q55 and Q56, so do not read their solutions before class.

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