Payoff Implications of Incentive Contracting

Daniel Garrett

No 14725, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: In the context of a canonical agency model, 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.

Keywords: Mechanism design; Robustness; Procurement (search for similar items in EconPapers)
JEL-codes: D82 (search for similar items in EconPapers)
Date: 2020-05
New Economics Papers: this item is included in nep-cta, nep-des, nep-hrm and nep-mic
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://cepr.org/publications/DP14725 (application/pdf)

Related works:
Journal Article: Payoff implications of incentive contracting (2021)
Working Paper: Payoff Implications of Incentive Contracting (2020)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:14725

Ordering information: This working paper can be ordered from
https://cepr.org/publications/DP14725

Access Statistics for this paper

More papers in CEPR Discussion Papers from Centre for Economic Policy Research 33 Great Sutton Street, London EC1V 0DX, UK.
Bibliographic data for series maintained by CEPR ().