Strategies in the principal-agent model

In this paper, we study the principal-agent problem. It is well known that in continuous-time, it is possible to prove the existence of an equilibrium <InlineEquation ID="IEq1"> <EquationSource Format="TEX">$$ (u^{*},S^{*})$$</EquationSource> </InlineEquation> in a considerably general setting, and however little is known about the strategies themselves. Our goal is to present a universal way to construct these strategies as limiting strategies of a very simple type. Copyright Springer-Verlag 2013