Dynamic Contracts with Moral Hazard and Adverse Selection
Alex Gershkov and
Motty Perry ()
No 001-11, Working Papers from International School of Economics at TSU, Tbilisi, Republic of Georgia
We study a novel dynamic principal—agent setting with moral hazard and adverse selection (persistent as well as repeated). In the model an agent whose skills are his private information faces a finite sequence of tasks, one after the other. Upon arrival of each task the agent learns its level of difficulty and then chooses whether to accept or refuse each task in turn, and how much effort to exert. Although his decision to accept or refuse a task is publicly known, the agent's effort level is his private information. We characterize optimal contracts and show that the per-period utility of the agent approaches his per-period utility when his skills are publicly known, as the discount factor and the time horizon increase.
Pages: 52 pages
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
Our link check indicates that this URL is bad, the error code is: 404 Not Found
Journal Article: Dynamic Contracts with Moral Hazard and Adverse Selection (2012)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:tbs:wpaper:11-001
Access Statistics for this paper
More papers in Working Papers from International School of Economics at TSU, Tbilisi, Republic of Georgia Contact information at EDIRC.
Bibliographic data for series maintained by (). This e-mail address is bad, please contact .