Publication: Optimal contracts when the players think different
dc.affiliation.dpto | UC3M. Departamento de EconomÃa | es |
dc.contributor.author | Dumav, Martin | |
dc.contributor.author | Khan, Urmee | |
dc.contributor.author | Rigotti, Luca | |
dc.contributor.editor | Universidad Carlos III. Departamento de EconomÃa | es |
dc.date.accessioned | 2023-10-03T15:58:07Z | |
dc.date.available | 2023-10-03T15:58:07Z | |
dc.date.issued | 2023-10-03 | |
dc.description.abstract | In a moral hazard model with heterogeneous beliefs, we show that the efficient risksharing contract does not result in a constant wage and the optimal first-best contract may not be increasing in output. When actions are unobservable, heterogeneity in beliefs implies that the monotone likelihood ratio ranking does not ensure that the wage scheme in the optimal contract is non-decreasing in output. This is because differences in beliefs may affect the incentive provision in a non-monotone way. The standard monotonicity result with common beliefs extends to belief heterogeneity when the agent is more optimistic than the principal. Yet, in the reverse case, the optimal contract can be non-monotone. | en |
dc.identifier.issn | 2340-5031 | es |
dc.identifier.uri | https://hdl.handle.net/10016/38519 | |
dc.identifier.uxxi | DT/0000002090 | es |
dc.language.iso | eng | es |
dc.relation.ispartofseries | Working paper. Economics | en |
dc.relation.ispartofseries | 23-07 | es |
dc.relation.projectID | Gobierno de España. ECO2017-86261-P | es |
dc.relation.projectID | Comunidad de Madrid. MDM 2014-0431 | es |
dc.rights | Atribución-NoComercial-SinDerivadas 3.0 España | * |
dc.rights.uri | http://creativecommons.org/licenses/by-nc-nd/3.0/es/ | * |
dc.subject.eciencia | EconomÃa | es |
dc.subject.jel | D82 | es |
dc.subject.jel | D86 | es |
dc.subject.jel | M52 | es |
dc.subject.other | Contracting | en |
dc.subject.other | Heterogeneous Beliefs | en |
dc.subject.other | Monotone Likelihood Ratio | en |
dc.subject.other | Moral Hazard | en |
dc.title | Optimal contracts when the players think different | en |
dc.type | working paper | * |
dspace.entity.type | Publication |
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