The Multiperiod Principal-Agent Problem.
In repeated principal-agent models, long-term contracts can improve on short-term contracts only if they commit either the principal or agent to a payoff in some future circumstances lower than could be obtained from a short-term contract negotiated if that circumstance occurs. The authors show that...
| Main Authors: | , |
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| 格式: | Journal article |
| 語言: | English |
| 出版: |
1988
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| 總結: | In repeated principal-agent models, long-term contracts can improve on short-term contracts only if they commit either the principal or agent to a payoff in some future circumstances lower than could be obtained from a short-term contract negotiated if that circumstance occurs. The authors show that efficient contracting under moral hazard alone does not require long-term commitment from that principal. Provided a short-term contract can punish the agent sufficiently (in a sense made precise), it requires no commitment from the agent either. Then linking payoffs in one period to outcomes in previous periods does not improve the trade-off between incentives and risk sharing. |
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