Relational incentive contracts with productivity shocks

• 成果类型: Article
• 署名作者: Malcomson, James M.
• 署名单位: University of Oxford
• 刊物名称: GAMES AND ECONOMIC BEHAVIOR
• ISSN/ISSBN: 0899-8256
• DOI: 10.1016/j.geb.2015.06.004
• 发表日期: 2015
• 页码: 122-137
• 关键词: Relational incentive contracts; shocks; Principal types; Agent types

摘要

This paper extends Levin's (2003) relational contract model by having not only the agent's cost of effort (agent's type), but also the value of that effort to the principal (principal's type) subject to i.i.d. shocks. When optimal effort is fully pooled across agent types for multiple principal types, it is also pooled across those principal types. When optimal effort separates some agent types for multiple principal types, efforts of those agent types may be separated across principal types. But then, somewhat perversely, some agent type's effort is decreasing in the principal's value of effort. When agent type is uniformly distributed, that applies to agent types with lower effort cost, so reducing the difference in effort between low and high effort cost types. This result extends to the principal's type being observed only by the principal if the marginal cost of effort to the agent is sufficiently convex. (C) 2015 Elsevier Inc. All rights reserved.