Wealth effects in the principal agent model
成果类型：
Article
署名作者：
Thiele, H; Wambach, A
署名单位：
University of Munich; University of Munich
刊物名称：
JOURNAL OF ECONOMIC THEORY
ISSN/ISSBN：
0022-0531
DOI：
10.1006/jeth.1999.2570
发表日期：
1999
页码：
247-260
关键词：
摘要：
This paper addresses the question of how the principal's surplus and agency costs depend on the agent's wealth. Our main results are that if the agent has an additively separable utility function in income and effort and his degree of absolute prudence is smaller than three times the agent's degree of absolute risk aversion, then the principal's expected pay-off is smaller the richer the agent. For general utility functions, this result also holds if the first order approach is applicable and one further technical assumption is satisfied. If, however, the participation constraint does not bind, then richer agents are cheaper. Journal of Economic Literature Classification Numbers: D82, G3, J33. (C) 1999 Academic Press.