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- W3149109651 abstract "This paper describes a new continuous-time principal-agent model, in which the output is a diffusion process with drift determined by the agent’s unobserved effort. The risk-averse agent receives consumption continuously. An optimal contract, based on the agent’s continuation value as a state variable, is computed by a new method using a differential equation. During employment the output path stochastically drives the agent’s continuation value until it hits a low retirement point or a high retirement point. Unlike in related discrete-time models, one can use calculus to derive comparative statics and evaluate inefficiency" @default.
- W3149109651 created "2021-04-13" @default.
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- W3149109651 date "2005-01-01" @default.
- W3149109651 modified "2023-09-24" @default.
- W3149109651 title "A Continuous-Time Version of the Principal-Agent" @default.
- W3149109651 hasPublicationYear "2005" @default.
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