Monotone contracts

• 成果类型: Article
• 署名作者: Bird, Daniel; Frug, Alexander
• 署名单位: Tel Aviv University; Pompeu Fabra University; Barcelona School of Economics
• 刊物名称: THEORETICAL ECONOMICS
• ISSN/ISSBN: 1933-6837
• DOI: 10.3982/TE4842
• 发表日期: 2022-07-01
• 页码: 1041-1073
• 关键词: Dynamic contracting; activities; seniority; D86

摘要

We develop a framework for deriving dynamic monotonicity results in long-term stochastic contracting problems with symmetric information. Specifically, we construct a notion of concave separable activity that encompasses many prevalent contractual components (e.g., wage, effort, level of production, etc.). We then provide a tight condition under which such activities manifest a form of seniority in every contracting problem in which they are present: any change that occurs in the level of the activity over time favors the agent. Our work unifies and significantly generalizes many existing results and can also be used to establish monotonicity results in other settings of interest.