Using Reputation Costs in Non-Repeated Incentive Contracts

Katerina Sherstyuk

No 563, Department of Economics - Working Papers Series from The University of Melbourne

Abstract: In principal-agent models with moral hazard and limited liability, the principal may threaten the agent with reputaion damages in case of poor performance. We show that such reputation threats, although inefficient, often help the principal to discipline the agent.

Keywords: INFORMATION; INFORMATION USERS (search for similar items in EconPapers)
JEL-codes: D82 (search for similar items in EconPapers)
Pages: 34 pages
Date: 1997
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Persistent link: https://EconPapers.repec.org/RePEc:mlb:wpaper:563

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