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...
| Autores principales: | , |
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| Formato: | Journal article |
| Lenguaje: | English |
| Publicado: |
1988
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| _version_ | 1826286062437138432 |
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| author | Malcomson, J Spinnewyn, F |
| author_facet | Malcomson, J Spinnewyn, F |
| author_sort | Malcomson, J |
| collection | OXFORD |
| description | 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. |
| first_indexed | 2024-03-07T01:38:12Z |
| format | Journal article |
| id | oxford-uuid:95ebedc7-e721-41d0-b6bd-e8edf945dca7 |
| institution | University of Oxford |
| language | English |
| last_indexed | 2024-03-07T01:38:12Z |
| publishDate | 1988 |
| record_format | dspace |
| spelling | oxford-uuid:95ebedc7-e721-41d0-b6bd-e8edf945dca72022-03-26T23:49:34ZThe Multiperiod Principal-Agent Problem.Journal articlehttp://purl.org/coar/resource_type/c_dcae04bcuuid:95ebedc7-e721-41d0-b6bd-e8edf945dca7EnglishDepartment of Economics - ePrints1988Malcomson, JSpinnewyn, FIn 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. |
| spellingShingle | Malcomson, J Spinnewyn, F The Multiperiod Principal-Agent Problem. |
| title | The Multiperiod Principal-Agent Problem. |
| title_full | The Multiperiod Principal-Agent Problem. |
| title_fullStr | The Multiperiod Principal-Agent Problem. |
| title_full_unstemmed | The Multiperiod Principal-Agent Problem. |
| title_short | The Multiperiod Principal-Agent Problem. |
| title_sort | multiperiod principal agent problem |
| work_keys_str_mv | AT malcomsonj themultiperiodprincipalagentproblem AT spinnewynf themultiperiodprincipalagentproblem AT malcomsonj multiperiodprincipalagentproblem AT spinnewynf multiperiodprincipalagentproblem |