Dynamic contracts and learning by doing

Julien Prat

This paper studies the design of optimal contracts in dynamic environments where agents learn by doing. We derive a condition under which contracts are fully incentive compatible. A closed-form solution is obtained when agents have CARA utility. It shows that human capital accumulation strengthens the power of incentives and allows the principal to provide the agent with better insurance against transitory risks.

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Year of publication:	2014
Authors:	Prat, Julien
Publisher:	Bonn : IZA
Subject:	human capital \| principal agent problem \| moral hazard \| Moral Hazard \| Moral hazard \| Prinzipal-Agent-Theorie \| Agency theory \| Humankapital \| Human capital \| Vertragstheorie \| Contract theory \| Lernprozess \| Learning process

Extent:	Online-Ressource (29 S.) graph. Darst.
Series:	Discussion paper series / IZA. - Bonn : IZA, ZDB-ID 2120053-1. - Vol. 7961
Type of publication:	Book / Working Paper
Type of publication (narrower categories):	Arbeitspapier ; Working Paper ; Graue Literatur ; Non-commercial literature
Language:	English
Notes:	Systemvoraussetzung: Acrobat Reader
Other identifiers:	hdl:10419/93343 [Handle]
Classification:	D82 - Asymmetric and Private Information ; D83 - Search, Learning, Information and Knowledge ; J24 - Human Capital; Skills; Occupational Choice; Labor Productivity ; J41 - Contracts: Specific Human Capital, Matching Models, Efficiency Wage Models, and Internal Labor Markets
Source:	ECONIS - Online Catalogue of the ZBW

Persistent link: https://ebvufind01.dmz1.zbw.eu/10010246654