Moral hazard with non-additive uncertainty: When are actions implementable?

Martin Dumav and Urmee Khan

Economics Letters, 2018, vol. 171, issue C, 110-114

Abstract: We provide sufficient conditions on the information structure for implementing actions in a moral hazard setting when Agent has non-probabilistic uncertainty. For a finite action space, under three well-known formulations of Agent’s ambiguity attitude, contracts that partition the outcome space in two parts, and are piecewise constant on each part, are enough to implement an action.

Keywords: Moral hazard; Non-probabilistic uncertainty; Ambiguity aversion; Implementability (search for similar items in EconPapers)
JEL-codes: D81 D82 D86 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:171:y:2018:i:c:p:110-114

DOI: 10.1016/j.econlet.2018.06.028

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