Consistency between principal and agent with differing time horizons: Computing incentives under risk
European Journal of Operational Research, 2019, vol. 277, issue 3, 1113-1123
In a parsimonious model, we analyze how to obtain consistent incentives when both principal and agent are risk-averse and when a setting prevails in which the agent may have a shorter time horizon than the principal. Intertemporal dependencies in risky cash flows are taken into account.
Keywords: Decision analysis; Investment decision; Intertemporal dependencies; Performance measure; Relative benefit cost allocation (search for similar items in EconPapers)
JEL-codes: D82 G31 M41 (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ejores:v:277:y:2019:i:3:p:1113-1123
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