An Analysis of the Principal-Agent Problem Export

@article{citeulike:2948496, abstract = {Most analyses of the principal-agent problem assume that the principal chooses an incentive scheme to maximize expected utility subject to the agent's utility being at a stationary point. An important paper of Mirrlees has shown that this approach is generally invalid. We present an alternative procedure. If the agent's preferences over income lotteries are independent of action, we show that the optimal way of implementing an action by the agent can be found by solving a convex programming problem. We use this to characterize the optimal incentive scheme and to analyze the determinants of the seriousness of an incentive problem.}, author = {Grossman, Sanford J. and Hart, Oliver D.}, citeulike-article-id = {2948496}, citeulike-linkout-0 = {http://dx.doi.org/10.2307/1912246}, citeulike-linkout-1 = {http://www.jstor.org/stable/1912246}, doi = {10.2307/1912246}, journal = {Econometrica}, keywords = {agency, contract, microeconomic\_theory}, number = {1}, pages = {7--45}, posted-at = {2008-07-01 15:41:31}, priority = {4}, publisher = {The Econometric Society}, title = {An Analysis of the Principal-Agent Problem}, url = {http://dx.doi.org/10.2307/1912246}, volume = {51}, year = {1983} }

TY - JOUR ID - citeulike:2948496 L3 - citeulike-article-id:2948496 N2 - Most analyses of the principal-agent problem assume that the principal chooses an incentive scheme to maximize expected utility subject to the agent's utility being at a stationary point. An important paper of Mirrlees has shown that this approach is generally invalid. We present an alternative procedure. If the agent's preferences over income lotteries are independent of action, we show that the optimal way of implementing an action by the agent can be found by solving a convex programming problem. We use this to characterize the optimal incentive scheme and to analyze the determinants of the seriousness of an incentive problem. IS - 1 JF - Econometrica EP - 45 TI - An Analysis of the Principal-Agent Problem PB - The Econometric Society VL - 51 SP - 7 KW - agency KW - contract KW - microeconomic_theory AU - Grossman, Sanford AU - Hart, Oliver PY - 1983/// UR - http://dx.doi.org/10.2307/1912246 ER -