Dynamic contracts when agent's quality is unknown

, () and , ()
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,: IAE (CSIC), Barcelona GSE and CREST, Paris.
,: Department of Economics, NYU
Authors registered in the RePEc Author Service: Boyan Jovanovic () and Julien Prat

Theoretical Economics, 2014, vol. 9, issue 3

Abstract: We solve a long-term contracting problem with symmetric uncertainty about the agent's quality, and a hidden action of the agent. As information about quality accumulates, incentives become easier to provide because the agent has less room to manipulate the principal's beliefs. This result is opposite to that in the literature on "career concerns" in which incentives via short-term contracts become harder to provide as the agent's quality is revealed over time.

Keywords: Principal-agent model; optimal contract; learning; private information; reputation; career (search for similar items in EconPapers)
JEL-codes: D82 D83 E24 J41 (search for similar items in EconPapers)
Date: 2014-10-06
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Citations: View citations in EconPapers (9)

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Related works:
Working Paper: DYNAMIC INCENTIVE CONTRACTS UNDER PARAMETER UNCERTAINTY (2011)
Working Paper: Dynamic Incentive Contracts under Parameter Uncertainty (2010)
Working Paper: Dynamic Incentive Contracts Under Parameter Uncertainty (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:the:publsh:1439

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