Robustness of a fixed-rent contract in a standard agency model

Son Kim () and Susheng Wang ()

Economic Theory, 2004, vol. 24, issue 1, 128 pages

Abstract: It is well known that there are infinitely many incentive contracts that achieve the full information outcome in the standard agency model when the agent is risk-neutral. However, since Harris and Raviv (1979), the fixed-rent contract has been the focal point among those infinitely many first-best contracts. This paper examines whether the fixed-rent contract is robust or not in various circumstances. Copyright Springer-Verlag Berlin/Heidelberg 2004

Keywords: Fixed-rent contract; Limiting contract; Robustness. (search for similar items in EconPapers)
Date: 2004
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DOI: 10.1007/s00199-003-0411-2

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