Low outcomes and the first-order approach to agency problems

Óscar Gutiérrez
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Óscar Gutiérrez: Universitat Autònoma de Barcelona

Investigaciones Economicas, 2007, vol. 31, issue 2, pages 341-348

Abstract: This paper claims that the first-order approach to agency problems can only hold if the likelihood ratio is bounded from below. None of the classic sets of su cient conditions to validate it (Mirrlees-Rogerson (1979-1985) and Jewitt (1988)) guarantees such a condition.

Keywords: Agency; likelihood ratio; first-order approach. (search for similar items in EconPapers)
JEL-codes: J33 M40 (search for similar items in EconPapers)
Date: 2007

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