Question: Consider a risk-neutral principal and an agent with utility function Assume that the contract being provided to the agent is based on the final outcome

Consider a risk-neutral principal and an agent with utility function

Assume that the contract being provided to the agent is based on the final outcome only and that the outcome density satisfies the monotone likelihood ratio property (MLRP). What is the optimal contract? Under what circumstances is the optimal contract linear in the final outcome? Convex? Concave?

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