EconPapers    
Economics at your fingertips  
 

A dynamic principal-agent problem as a feedback Stackelberg differential game

Ngo Long and Gerhard Sorger ()

Central European Journal of Operations Research, 2010, vol. 18, issue 4, 491-509

Abstract: We consider situations in which a principal tries to induce an agent to spend effort on accumulating a state variable that affects the well-being of both parties. The only incentive mechanism that the principal can use is a state-dependent transfer of her own utility to the agent. Formally, the model is a Stackelberg differential game in which the players use feedback strategies. Whereas in general Stackelberg differential games with feedback strategy spaces the leader’s optimization problem has non-standard features that make it extremely hard to solve, in the present case this problem can be rewritten as a standard optimal control problem. A linear-quadratic example is used to illustrate our approach. Copyright Springer-Verlag 2010

Keywords: Differential game; Principal-agent model; Feedback strategies; Stackelberg equilibrium; C61; C73; D82 (search for similar items in EconPapers)
Date: 2010
References: View references in EconPapers View complete reference list from CitEc
Citations View citations in EconPapers (2) Track citations by RSS feed

Downloads: (external link)
http://hdl.handle.net/10.1007/s10100-010-0172-5 (text/html)
Access to full text is restricted to subscribers.

Related works:
Working Paper: A dynamic pricipal-agent problem as a feedback Stackelberg differentioal game (2009) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:cejnor:v:18:y:2010:i:4:p:491-509

Ordering information: This journal article can be ordered from
http://www.springer. ... search/journal/10100

Access Statistics for this article

Central European Journal of Operations Research is currently edited by Ulrike Leopold-Wildburger

More articles in Central European Journal of Operations Research from Springer, Slovak Society for Operations Research, Hungarian Operational Research Society, Czech Society for Operations Research, Österr. Gesellschaft für Operations Research (ÖGOR), Slovenian Society Informatika - Section for Operational Research, Croatian Operational Research Society
Bibliographic data for series maintained by Sonal Shukla ().

 
Page updated 2018-08-20
Handle: RePEc:spr:cejnor:v:18:y:2010:i:4:p:491-509