@TechReport{iza:izadps:dp342, author={Schnedler, Wendelin}, title={The Virtue of Being Underestimated: A Note on Discriminatory Contracts in Hidden Information Models}, year={2001}, month={Aug}, institution={Institute of Labor Economics (IZA)}, address={Bonn}, type={IZA Discussion Paper}, number={342}, url={https://www.iza.org/publications/dp342}, abstract={A standard hidden information model is considered to study the influence of the a priori productivity distribution on the optimal contract. A priori more productive (hazard rate dominant) agents work less, enjoy lower rents, but generate a higher expected surplus.}, keywords={stochastic order relation;statistical discrimination;Adverse selection}, }