Ding, Chuan; Li, Yang; Cui, Zhenyu - In: Journal of management science and engineering 8 (2023) 3, pp. 342-368
We consider a general framework of optimal contract design under the heterogeneity and short-termism of agents. Our research shows that the optimal contract must weigh the agent's information rent, incentive cost, and benefit to overcome the contract's adverse selection and moral hazards. Agents...