TY  - JOUR
AU  - Arnott,Richard
AU  - Stiglitz,Joseph
TI  - The Welfare Economics of Moral Hazard
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 3316
PY  - 1991
Y2  - April 1991
UR  - http://www.nber.org/papers/w3316
L1  - http://www.nber.org/papers/w3316.pdf
N1  - Author contact info:
Richard J. Arnott
Department of Economics
Boston College
Chestnut Hill, MA 02467
Tel: 617/552-3674
Fax: 617/552-2308
E-Mail: richard.arnott@ucr.edu

Joseph E. Stiglitz
Uris Hall, Columbia University
3022 Broadway, Room 814
New York, NY  10027
Tel: 212/854-0671
Fax: 212/662-8474
E-Mail: jes322@columbia.edu
AB  - This paper shows that, except in certain limiting cases, competitive equilibrium with moral hazard is constrained inefficient. The first section compares the competitive equilibrium and the constrained social optimum in a fairly general model, and identifies types of market failure. Each of the subsequent sections focuses on a particular market failure.
ER  -