Extending the First-Order Approach to Principal-Agent Problems
Abstract:
The paper addresses a classic unsolved question of information economics. How can a principal best motivate a limited-liability agent whose action she observes with N(0,σ) measurement error? We characterise the solution for a wide class of cases. The solutions are easily computable. Some interesting comparative statics arise: for instance agents often work harder when there is moral hazard, than they would in the first-best. The methods generalise to families of distributions other than N(0,σ).
Date:
6 February 2018, 12:45
Venue:
Nuffield College, New Road OX1 1NF
Venue Details:
Butler Room
Speaker:
Ian Jewitt (University of Oxford)
Organising department:
Department of Economics
Part of:
Economic Theory Workshop
Booking required?:
Not required
Audience:
Members of the University only
Editors:
Erin Saunders,
Anne Pouliquen
