Basic Structures of Contracting Problems

Jaeyoung Sung
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Jaeyoung Sung: Ajou University

Chapter Chapter 2 in Contract Theory: Discrete- and Continuous-Time Models, 2023, pp 17-27 from Springer

Abstract: Abstract We use the classical sharecropping to introduce the first- and second-best contracting problems, and their basic structures. We discuss basic elements in the first-best contracting such as property right and optimal risk-sharing rule, and the participation constraint, and those of the second-best contracting such as nonverifiability of the agent’s actions and the incentive compatibility condition.

Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-981-99-5487-2_2

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DOI: 10.1007/978-981-99-5487-2_2

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