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Relative Performance or Team Evaluation? Optimal Contracts for Other-Regarding Agents

Bartling, Björn - 2010

This paper derives optimal incentive contracts for agents with other-regarding preferences. It offers a behavioral explanation for the empirically observed lack of relative performance evaluation. We analyze a principal-multi agent model and assume that agents are inequity averse or status...

Persistent link: https://www.econbiz.de/10014224219

Chapter 10. Recursive Contracts and Endogenously Incomplete Markets

Golosov, M.; Tsyvinski, A.; Werquin, N. - In: Handbook of macroeconomics : volume 2, v. 2A-2B SET, (pp. 725-841). 2016

In this chapter we study dynamic incentive models in which risk sharing is endogenously limited by the presence of informational or enforcement frictions. We comprehensively overview one of the most important tools for the analysis such problems—the theory of recursive contracts. Recursive...

Persistent link: https://www.econbiz.de/10014024287

Contracting with endogenously incomplete commitment: escape clauses

Tangerås, Thomas P.; Gick, Wolfgang - 2021

We study mechanism design under endogenously incomplete commitment as it arises in contracting with escape clauses. An … can offer an ex-post contract. Escape clauses are valuable when the maximal number of initial contracts is smaller than … the number of agent types. We identify a sufficient condition for incentive optimality of ex-post contracting. Escape …

Persistent link: https://www.econbiz.de/10012520279

Hidden Action and Outcome Contractibility : An Experimental Test of Moral Hazard Theory

Hoppe, Eva I.; Schmitz, Patrick W. - 2019

negotiate contracts. In line with contract theory, the contractibility of the outcome plays a crucial role when effort is a …

Persistent link: https://www.econbiz.de/10014105234

Complete contracts under incomplete information

Curello, Gregorio; Lyu, Qianjun; Zhang, Yimeng - 2024

We study a moral hazard model in which the output is stochastically determined by both the agent's hidden effort and an uncertain state of the world. We investigate how the contractibility of the ex-post realization of the state affects the principal's incentive to provide information. While...

Persistent link: https://www.econbiz.de/10015135462

Honesty and relational contracts : conference paper

Holger, Herz; Schmutzler, Armin; André, Volk - 2014

We study the economic consequences of opportunities for dishonesty in an environment where efficiency relevant behaviour is not contractible, but rather incentivized by informal agreements in an ongoing relationship. We document the repeated interaction between a principal and an agent who,...

Persistent link: https://www.econbiz.de/10010483887

Learning from failures : optimal contract for experimentation and production

Khalil, Fahad; Lawarrée, Jacques; Rodivilov, Alexander - 2018

derive the optimal contract for both experimentation and production when the agent has private information about his … asymmetric information is endogenously determined by the length of the experimentation stage. An optimal contract uses the length …

Persistent link: https://www.econbiz.de/10011926023

Self-Enforcing Linear Contracts

Kvaloy, Ola - 2005

bargaining power and outside options will determine contract choice. If the agent's ex post bargaining position is weak, the …

Persistent link: https://www.econbiz.de/10014064242

Sequential procurement with contractual and experimental learning

Gur, Yonatan; Macnamara, Gregory; Saban, Daniela - 2019

We study the design of sequential procurement strategies that integrate stochastic and strategic information. We consider a buyer who repeatedly demands a certain good and is unable to commit to long-term contracts. In each time period, the buyer makes a price offer to a seller who has private,...

Persistent link: https://www.econbiz.de/10012065183

(Bad) reputation in relational contracting

Deb, Rahul; Mitchell, Matthew F.; Pai, Mallesh M. - In: Theoretical economics : TE ; an open access journal in … 17 (2022) 2, pp. 763-800

Motivated by markets for ''expertise,'' we study a bandit model where a principal chooses between a safe and risky arm. A strategic agent controls the risky arm and privately knows whether its type is high or low. Irrespective of type, the agent wants to maximize duration of experimentation with...

Persistent link: https://www.econbiz.de/10013273779