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Payoff Implications of Incentive Contracting

Garrett, Daniel (2021) 'Payoff Implications of Incentive Contracting.' Theoretical Economics, 16 (4). pp. 1281-1312. ISSN 1933-6837

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Abstract

In the context of a canonical agency mo del, we study the payoff implications of introducing optimally-structured incentives. We do so from the perspective of an analyst who does not know the agent's preferences for responding to incentives, but does know that the principal knows them. We provide, in particular, tight bounds on the principal's expected benefit from optimal incentive contracting across feasible values of the agent's expected rents. We thus show how economically relevant predictions can be made robustly given ignorance of a key primitive.

Item Type: Article
Uncontrolled Keywords: asymmetric information; mechanism design; robustness; pro curement
Divisions: Faculty of Social Sciences
Faculty of Social Sciences > Economics, Department of
SWORD Depositor: Elements
Depositing User: Elements
Date Deposited: 06 Dec 2021 11:55
Last Modified: 02 Mar 2022 23:05
URI: http://repository.essex.ac.uk/id/eprint/31510

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