Author: Joseph FarrellPublisher:
ISBN:
Category : Contracts
Languages : en
Pages : 56
Book Description
Optimal Contracts with Lock-in
Author: Joseph FarrellPublisher:
ISBN:
Category : Contracts
Languages : en
Pages : 56
Book Description
Optimal Contracts with Fairness Concerns
Author: Yin Chi TamPublisher:
ISBN:
Category :
Languages : en
Pages : 0
Book Description
In an organization, the principal may care about both efficiency and fairness. In this paper, we study the optimal contracts between a principal and multiple agents when the principal favors a more even expost wage distribution. We characterize the principal's fairness concern by a convex shading cost function and it is shown that the optimal contract is either a fixed wage contract or an incentive contract. Moreover, interior solution exists under certain conditions where the principal would provide both fixed and incentive contracts to agents. We also show that the optimal contracts tend to be more hybrid if the shading cost becomes more convex and the fraction of the incentive contract would decrease as the principal cares more about fairness.
Optimal Contracts in Continuous Time Principal-agent Problems
Author: Hui Ou-YangOn the Curvature of Optimal Contracts
Author: Hans K. HvideOptimal Contracts Under Generalized Verifiability Correspondences
Author: Francesco SquintaniPublisher:
ISBN:
Category : Covenants not to compete
Languages : en
Pages : 34
Book Description
Monotone Second-best Optimal Contracts
Author: George Edward MonahanOptimal Contracts in an Idiosyncratic Market
Author: Michael RiordanOptimal Contracts when Enforcement is a Decision Variable
Author: Stefan KrasaOptimal Contracts when the Players Think Different
Author: Martin DumavOptimal Contracts in a Dynamic Costly State Verification Model
Author: Cyril MonnetPublisher:
ISBN:
Category :
Languages : en
Pages : 45
Book Description
This paper describes optimal contracts in a dynamic costly state verification model with stochastic monitoring. An agent operates a risky project on behalf of a principal over several periods. Each period, the principal can observe the revenues from the project provided he incurs a fixed cost. We show that an optimal contract exists with the property that, in each period and for every possible revenue announcement by the agent, either the principal claims the entire proceeds from the project or promises to claim nothing in the future. This structure of payments enables the principal to minimize audit costs over the duration of the project. Those optimal contracts are such that the agent's expected income rises with time. Moreover, except in at most one period, the principal claims the entire returns of the project whenever audit occurs. We also provide conditions under which all optimal contracts must satisfy these properties.