Moral hazard and subjective evaluation

• 成果类型: Article
• 署名作者: Ishiguro, Shingo; Yasuda, Yosuke
• 署名单位: University of Osaka
• 刊物名称: JOURNAL OF ECONOMIC THEORY
• ISSN/ISSBN: 0022-0531
• DOI: 10.1016/j.jet.2023.105619
• 发表日期: 2023
• 关键词: Moral hazard; multiple agents; Subjective evaluation

摘要

This study investigates optimal contracts to solve the moral hazard problem with subjective evaluation in a static environment with multiple agents wherein the principal observes agents' performances privately. Despite the limitations of feasible contracts that the principal can credibly offer, we show the irrelevance theorem that even under subjective evaluation, the principal can be as well off as if agents' performances are objective and verifiable, provided there are at least two risk-neutral agents whose actions satisfy a certain condition on their output distributions. Our irrelevance result encompasses a large class of moral hazard problems, including statistically correlated and technologically interdependent performance signals. We also extend the model to include multidimensional actions, limited liability constraints, and collusion among agents.(c) 2023 Elsevier Inc. All rights reserved.