Agency conflicts in the presence of random private benefits from project implementation
AbstractWe study a contracting problem where a principal delegates the decision to implement a “project” to an agent who obtains private information about the value of the project before making the implementation decision. Moral hazard arises because the agent gets private random non-contractible benefits, or incurs private random non-contractible costs, if the project is implemented. This contracting problem is pervasive, when “project” and “benefits” are interpreted broadly.
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Bibliographic InfoArticle provided by Elsevier in its journal Economics Letters.
Volume (Year): 123 (2014)
Issue (Month): 3 ()
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Web page: http://www.elsevier.com/locate/ecolet
Optimal contracting; Moral hazard; Random private benefits; Depressed incentives; Increasing residual values;
Find related papers by JEL classification:
- D8 - Microeconomics - - Information, Knowledge, and Uncertainty
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