A simple impossibility result in behavioral contract theory
Giovanni Immordino (),
Anna Maria Menichini () and
Economics Letters, 2011, vol. 113, issue 3, 307-309
This paper studies a contract between an optimistic agent and a realistic principal, both risk-neutral. Even with complete contracts and ex-ante symmetric information, it may be impossible to achieve the first-best unless the weight on emotions is sufficiently low.
Keywords: Hidden action; Anticipatory utility; Impossibility (search for similar items in EconPapers)
JEL-codes: D86 (search for similar items in EconPapers)
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Working Paper: A Simple Impossibility Result in Behavioral Contract Theory (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:113:y:2011:i:3:p:307-309
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