Comparative statics of contracts. Use the fact that P’s optimal contract under asymmetric information is completely characterized by [B.15] and [B.16], to investigate the way in which changes in model...

Comparative statics of contracts. Use the fact that P’s optimal contract under asymmetric information is completely characterized by [B.15] and [B.16], to investigate the way in which changes in model parameters affect the optimal contract. In particular, what factors tend to increase agency costs?