| 来源类型 | Discussion paper |
| 规范类型 | 论文 |
| 来源ID | DP4438 |
| DP4438 Cities and Cultures | |
| Gianmarco Ottaviano; Giovanni Peri | |
| 发表日期 | 2004-06-23 |
| 出版年 | 2004 |
| 语种 | 英语 |
| 摘要 | We develop general recursive methods to solve for optimal contracts in dynamic principal-agent environments with hidden states and hidden actions. In our baseline model, the principal observes nothing other than transfers. Nevertheless, optimal incentive-constrained insurance can be attained. We show that the optimal contract can be implemented as a recursive direct mechanism with a vector of utility promises as the state variable. The standard recursive formulation suffers from a curse of dimensionality that arises from the interaction of hidden income and hidden actions; this curse can be overcome by introducing judiciously chosen utility bounds for deviation behaviour off the equilibrium path. Our methods generalize to environments with multiple actions and additional states. The key to implementing these extensions is to introduce multiple layers of off-path utility bounds. |
| 主题 | Public Economics |
| 关键词 | Mechanism design Dynamic contracts Recursive contracts |
| URL | https://cepr.org/publications/dp4438 |
| 来源智库 | Centre for Economic Policy Research (United Kingdom) |
| 资源类型 | 智库出版物 |
| 条目标识符 | http://119.78.100.153/handle/2XGU8XDN/533391 |
| 推荐引用方式 GB/T 7714 | Gianmarco Ottaviano,Giovanni Peri. DP4438 Cities and Cultures. 2004. |
| 条目包含的文件 | 条目无相关文件。 | |||||
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