Dynamic Contracts with Moral Hazard and Adverse Selection.

We study a novel dynamic principal–agent setting with moral hazard and adverse selection (persistent as well as repeated). In the model, an agent whose skills are his private information faces a finite sequence of tasks, one after the other. Upon arrival of each task, the agent learns its level of d...

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Detalles Bibliográficos
Publicado en:Review of Economic Studies Vol. 79; no. 1; pp. 268 - 307
Autores principales: Gershkov, Alex, Perry, Motty
Formato: Artículo
Publicado: Oxford University Press / USA Jan2012
Materias:
Acceso en línea:Ver este registro en EBSCOhost
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      dt: Jan2012
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        atl: Dynamic Contracts with Moral Hazard and Adverse Selection.
      aug:
        au:
          Gershkov, Alex
          Perry, Motty
        affil:
          Department of Economics and Center for the Study of Rationality, Hebrew University of Jerusalem
          Department of Economics, University of Warwick
      su:
        Adverse selection (Commerce)
        Moral hazard
        Multiagent systems
        Task analysis (Education)
        Task assessment
        Risk management in business
      sug:
        subj:
          Adverse selection (Commerce)
          Moral hazard
          Multiagent systems
          Task analysis (Education)
          Task assessment
          Risk management in business
      keyword:
        Adverse Selection
        Adverse Selection
      ab: We study a novel dynamic principal–agent setting with moral hazard and adverse selection (persistent as well as repeated). In the model, an agent whose skills are his private information faces a finite sequence of tasks, one after the other. Upon arrival of each task, the agent learns its level of difficulty and then chooses whether to accept or refuse each task in turn and how much effort to exert. Although his decision to accept or refuse a task is publicly known, the agent's effort level is his private information. We characterize optimal contracts and show that the per-period utility of the agent approaches his per-period utility when his skills are publicly known, as the discount factor and the time horizon increase.
      pubtype: Academic Journal
      doctype: Article
      src: R
    language: English
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