Payoff implications of incentive contracting

• 成果类型: Article
• 署名作者: Garrett, Daniel F.
• 署名单位: University of Essex
• 刊物名称: THEORETICAL ECONOMICS
• ISSN/ISSBN: 1933-6837
• DOI: 10.3982/TE4293
• 发表日期: 2021-11-01
• 页码: 1281-1312
• 关键词: Asymmetric information; mechanism design; Robustness; procurement; D82

摘要

In the context of a canonical agency model, we study the payoff implications of introducing optimally structured incentives. We do so from the perspective of an analyst who does not know the agent's preferences for responding to incentives, but does know that the principal knows them. We provide, in particular, tight bounds on the principal's expected benefit from optimal incentive contracting across feasible values of the agent's expected rents. We thus show how economically relevant predictions can be made robustly given ignorance of a key primitive.