University of Surrey

Test tubes in the lab Research in the ATI Dance Research

Dynamic contracts with moral hazard and adverse selection

Gershkov, A and Perry, M (2012) Dynamic contracts with moral hazard and adverse selection Review of Economic Studies, 79 (1). pp. 268-306.

Full text not available from this repository.

Abstract

We study a novel dynamic principal-agent setting with moral hazard and adverse selection (persistent as well as repeated). In the model, an agent whose skills are his private information faces a finite sequence of tasks, one after the other. Upon arrival of each task, the agent learns its level of difficulty and then chooses whether to accept or refuse each task in turn and how much effort to exert. Although his decision to accept or refuse a task is publicly known, the agent's effort level is his private information. We characterize optimal contracts and show that the per-period utility of the agent approaches his per-period utility when his skills are publicly known, as the discount factor and the time horizon increase. © The Author 2011. Published by Oxford University Press on behalf of The Review of Economic Studies Limited.

Item Type: Article
Authors :
NameEmailORCID
Gershkov, Aa.gershkov@surrey.ac.ukUNSPECIFIED
Perry, MUNSPECIFIEDUNSPECIFIED
Date : 16 February 2012
Identification Number : https://doi.org/10.1093/restud/rdr026
Depositing User : Symplectic Elements
Date Deposited : 16 May 2017 15:13
Last Modified : 17 May 2017 14:33
URI: http://epubs.surrey.ac.uk/id/eprint/818129

Actions (login required)

View Item View Item

Downloads

Downloads per month over past year


Information about this web site

© The University of Surrey, Guildford, Surrey, GU2 7XH, United Kingdom.
+44 (0)1483 300800