Read chapter six in M&R on moral hazard.and the a static principal-agent model that is akin to the insurance model. Read chapter 7 as well which gives a quadratic version of the model.
We will then confront time-based approaches in chapter 8. This essay likely will be useful to you.
If you have trouble accessing it, then wait till I can post it in UofIBox.
I would say that class on Monday is unlikely, but I will continue to update as I learn more.
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