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→Question B1: Work contracts with a continuum of workers
===Question B1: Work contracts with a continuum of workers===
A firm is hiring from a continuum of workers with unit mass. Workers are heterogenous in their cost of effort. A typical worker has a private cost type <math>c\,</math> where <math>c\,</math> is uniformly distributed on the interval <math>[\frac{1}{2},1]\,</math>. A worker of type <math>c\,</math> who puts in effort <math>e\,</math> pays a personal cost of effort <math>ce^2\,</math>. All workers are risk-neutral so their payoffs are simply :
<math>\pi_w = m -ce^2\,</math>
where <math>m is the compensation paid to the worker by the firm,
