Optimal Contract under Moral Hazard with Soft Information
نویسندگان
چکیده
منابع مشابه
Moral hazard with discrete soft information
I study a simple model of moral hazard with soft information. The risk-averse agent takes an action and she alone observes the stochastic outcome; hence the principal faces a problem of ex post adverse selection. Some measure of truthful revelation is necessary to implement any effort, for which an audit is required. And for effort to be induced the agent must be offered a rent. There exists a ...
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We examine a hierarchical model where a principal hires a risk averse supervisor to monitor the effort exerted by a productive agent. We assume that the supervisor can misreport the collected evidence without incurring any cost. We develop a corruption-proof contract which makes it sequentially rational for the supervisor to report truthfully. Crucial features of our contract are the timing at ...
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In a 1999 paper, Freeman proposes a model in which discount window lending and open market operations have different outcomes—an important development because in most of the literature the results of these policy tools are indistinguishable. Freeman’s conclusion that the central bank should absorb losses related to default to provide risk-sharing goes against the concern that central banks shou...
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We analyze a principal-agent problem with moral hazard where a principal searches for an opportunity of uncertain return, and hires an agent to evaluate available options. The agent’s effort affects the informativeness of a signal about an option’s return. Based on the information provided by the agent, the principal decides whether to exercise the option at hand. We derive properties of the op...
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ژورنال
عنوان ژورنال: American Economic Journal: Microeconomics
سال: 2013
ISSN: 1945-7669,1945-7685
DOI: 10.1257/mic.5.4.55