EconPapers    
Economics at your fingertips  
 

Monotone contracts

Daniel Bird () and Alexander Frug ()
Additional contact information
Daniel Bird: Eitan Berglas School of Economics, Tel Aviv University
Alexander Frug: Department of Economics and Business, Universitat Pompeu Fabra and Barcelona School of Economics

Theoretical Economics, 2022, vol. 17, issue 3

Abstract: We develop a framework for deriving dynamic monotonicity results in long-term stochastic contracting problems with symmetric information. Specifically, we construct a notion of concave separable activity that encompasses many prevalent contractual components (e.g., wage, effort, level of production, etc.). We then provide a tight condition under which such activities manifest a form of seniority in every contracting problem in which they are present: any change that occurs in the level of the activity over time favors the agent. Our work unifies and significantly generalizes many existing results and can also be used to establish monotonicity results in other settings of interest.

Keywords: Dynamic contracting; activities; seniority (search for similar items in EconPapers)
JEL-codes: D86 (search for similar items in EconPapers)
Date: 2022-07-14
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://econtheory.org/ojs/index.php/te/article/viewFile/20221041/34315/1004 (application/pdf)

Related works:
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:the:publsh:4842

Access Statistics for this article

Theoretical Economics is currently edited by Simon Board, Todd D. Sarver, Juuso Toikka, Rakesh Vohra, Pierre-Olivier Weill

More articles in Theoretical Economics from Econometric Society
Bibliographic data for series maintained by Martin J. Osborne ().

 
Page updated 2025-03-20
Handle: RePEc:the:publsh:4842