Consider a setting where principals compete for workers. Workers are risk averse while principals are risk neutral.

Each worker may have a high or a low productivity. This is captured assuming that high ability workers have a higher probability of generating a high value output relative to low ability workers.

Find the correct ending of the following sentence:

In such a setting we showed that, under adverse selection, a low ability worker...

is offered the symmetric information contract so that the worker remains fully insured.

is offered the symmetric information contract whereby the risk is shared so that neither the employer nor the worker are fully insured.

is offered a contract that is different from the symmetric information contract whereby the risk is shared so that neither the employer nor the worker are fully insured.

is offered a contract that is different from the symmetric information contract but so that the worker remains fully insured.