Dynamic contracting with persistent shocks
نویسندگان
چکیده
منابع مشابه
Dynamic contracting with persistent shocks
In this paper, we develop continuous-time methods for solving dynamic principal-agent problems in which the agent’s privately observed productivity shocks are persistent over time. We characterize the optimal contract as the solution to a system of ordinary differential equations and show that, under this contract, the agent’s utility converges to its lower bound—immiserization occurs. Unlike u...
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ژورنال
عنوان ژورنال: Journal of Economic Theory
سال: 2009
ISSN: 0022-0531
DOI: 10.1016/j.jet.2008.08.004