search query: @author Mirrlees, J. / total: 3
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| Author: | Mirrlees, J. |
| Title: | The theory of moral hazard and unobservable behaviour: part I |
| Journal: | Review of Economic Studies
1999 : JAN, VOL. 66:1(226), p. 3-22 |
| Index terms: | ECONOMICS MORAL HAZARD BEHAVIOURAL SCIENCE |
| Language: | eng |
| Abstract: | Principal-agent models are studied, in which outcomes conditional on the agent's action are uncertain, and the agent's behavior therefore unobservable. For a model with bounded agent's utility, conditions are given under which the first-best equilibrium can be approximated arbitrarily closely by contracts relating payment to observable outcomes. For general models, it is shown that the solution may not always be obtained by using the agent's first-order conditions as constraint. |
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