Renegotiation-proof contract in repeated agency

• 成果类型: Article
• 署名作者: Zhao, Rui R.
• 署名单位: State University of New York (SUNY) System; University at Albany, SUNY
• 刊物名称: JOURNAL OF ECONOMIC THEORY
• ISSN/ISSBN: 0022-0531
• DOI: 10.1016/j.jet.2005.05.003
• 发表日期: 2006
• 页码: 263-281
• 关键词: renegotiation proof contracts; repeated principal-agent

摘要

Renegotiation-proof contracts are studied in infinitely repeated principal-agent problem. Contracts satisfying a weaker notion of renegotiation-proofness always exist. The renegotiation-proof value function has a simple characterization: It is the principal's optimal value function when an appropriate lower bound is placed on the agent's expected utility. Sufficient conditions are provided for renegotiation-proof value function in finite horizon to converge to renegotiation-proof value function in infinite horizon as time goes to infinity. (c) 2005 Elsevier Inc. All rights reserved.