Contracting and search with heterogeneous principals and agents

• 成果类型: Article
• 署名作者: Starmans, Jan
• 署名单位: Stockholm School of Economics
• 刊物名称: JOURNAL OF ECONOMIC THEORY
• ISSN/ISSBN: 0022-0531
• DOI: 10.1016/j.jet.2023.105761
• 发表日期: 2024
• 关键词: Moral hazard; Contract design; search; Heterogeneous production technologies

摘要

This paper incorporates a risk-neutral principal -agent problem into a random search model to study contracting and search in general equilibrium. I introduce heterogeneity in principals' and agents' production technologies in terms of the distribution of output across states of nature. Under optimal contracting, this heterogeneity can give rise to complementarity in contracting between specific principal and agent types. In contrast to complementarity in production, complementarity in contracting affects only the division of the surplus but not its size and can induce principals to engage in overly intense search before forming a match. I show that a reduction in search frictions and contractual innovations can induce principals to engage in overly intense search.