Relational incentive contracts with persistent private information
This paper investigates relational incentive contracts with a continuum of privately observedagent types that are persistent over time. For a sufficiently productive relationship,a pooling contract exists in which all agent types continuing the relationshipchoose the same action. Necessary and suffi...
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| Format: | Working paper |
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University of Oxford
2012
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| _version_ | 1797061898562174976 |
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| author | Malcomson, J |
| author_facet | Malcomson, J |
| author_sort | Malcomson, J |
| collection | OXFORD |
| description | This paper investigates relational incentive contracts with a continuum of privately observedagent types that are persistent over time. For a sufficiently productive relationship,a pooling contract exists in which all agent types continuing the relationshipchoose the same action. Necessary and sufficient conditions are given for some separationto be feasible; the parties can then do better than with full pooling. When futureactions are optimal, however, separation of all types is not possible; the finest separationachievable is into partitions each containing a non-degenerate interval of types.Separation always involves lower output initially than after separation has occurred. |
| first_indexed | 2024-03-06T20:37:45Z |
| format | Working paper |
| id | oxford-uuid:3332eba9-1242-4655-b58f-e4f32ecd5218 |
| institution | University of Oxford |
| last_indexed | 2024-03-06T20:37:45Z |
| publishDate | 2012 |
| publisher | University of Oxford |
| record_format | dspace |
| spelling | oxford-uuid:3332eba9-1242-4655-b58f-e4f32ecd52182022-03-26T13:18:54ZRelational incentive contracts with persistent private informationWorking paperhttp://purl.org/coar/resource_type/c_8042uuid:3332eba9-1242-4655-b58f-e4f32ecd5218Bulk import via SwordSymplectic ElementsUniversity of Oxford2012Malcomson, JThis paper investigates relational incentive contracts with a continuum of privately observedagent types that are persistent over time. For a sufficiently productive relationship,a pooling contract exists in which all agent types continuing the relationshipchoose the same action. Necessary and sufficient conditions are given for some separationto be feasible; the parties can then do better than with full pooling. When futureactions are optimal, however, separation of all types is not possible; the finest separationachievable is into partitions each containing a non-degenerate interval of types.Separation always involves lower output initially than after separation has occurred. |
| spellingShingle | Malcomson, J Relational incentive contracts with persistent private information |
| title | Relational incentive contracts with persistent private information |
| title_full | Relational incentive contracts with persistent private information |
| title_fullStr | Relational incentive contracts with persistent private information |
| title_full_unstemmed | Relational incentive contracts with persistent private information |
| title_short | Relational incentive contracts with persistent private information |
| title_sort | relational incentive contracts with persistent private information |
| work_keys_str_mv | AT malcomsonj relationalincentivecontractswithpersistentprivateinformation |