Stochastic costly state verification and dynamic contracts

Latchezar Popov

Journal of Economic Dynamics and Control, 2016, vol. 64, issue C, 1-22

Abstract: I consider a dynamic costly state verification environment in which a risk-averse agent enters into a contract with a risk-neutral principal. The agent has random income which is unknown to the principal but can be verified at a cost. The principal can commit to executing random verifications.

Keywords: Stochastic costly state verification (search for similar items in EconPapers)
JEL-codes: C73 D82 (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:dyncon:v:64:y:2016:i:c:p:1-22

DOI: 10.1016/j.jedc.2015.12.006

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