A state-contingent production approach to principal-agent problems with an application to point-source pollution control

• 成果类型: Article
• 署名作者: Quiggin, J; Chambers, RG
• 署名单位: James Cook University; University System of Maryland; University of Maryland College Park
• 刊物名称: JOURNAL OF PUBLIC ECONOMICS
• ISSN/ISSBN: 0047-2727
• DOI: 10.1016/S0047-2727(98)00044-9
• 发表日期: 1998
• 页码: 441-472
• 关键词: Moral hazard; state-contingent production; point-source pollution; principal-agent problem

摘要

Two basic representations of principal-agent relationships, the 'state-space' and 'parameterized distribution' formulations, have emerged. Although the state-space formulation appears more natural, analytical studies using this formulation have had limited success. This paper develops a state-space formulation of the moral-hazard problem using a general representation of production under uncertainty. A closed-form solution for the agency-cost problem is derived. Comparative-static results are deduced. Next we solve the principal's problem of selecting the optimal output given the agency-cost function. The analysis is applied to the problem of point-source pollution control. (C) 1998 Published by Elsevier Science S.A. All rights reserved.