  I revisit the standard moral-hazard model, in which an agent's preference
over contracts is rooted in costly effort choice. I characterise the
behavioural content of the model in terms of empirically testable axioms, and
show that the model's parameters are identified. I propose general behavioural
definitions of relative (over)confidence and optimism, and characterise these
in terms of the parameters of the moral-hazard model. My formal results are
rooted in a simple but powerful insight: that the moral-hazard model is closely
related to the well-known 'variational' model of choice under uncertainty.
