Learning by doing vs. learning from others in a principal-agent model
We introduce learning in a principal-agent model of output sharing under moral hazard. We use social evolutionary learning to represent social learning and reinforcement, experience-weighted attraction (EWA) and individual evolutionary learning (IEL) to represent individual learning. Learning in the principal-agent model is difficult due to: the stochastic environment; the discontinuity in payoffs at the optimal contract; and the incorrect evaluation of foregone payoffs for IEL and EWA. Social learning is much more successful in adapting to the optimal contract than standard individual learning algorithms. A modified IEL using realized payoffs evaluation performs better but still falls short of social learning.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Romer, Paul M, 1986.
"Increasing Returns and Long-run Growth,"
Journal of Political Economy,
University of Chicago Press, vol. 94(5), pages 1002-1037, October.
- Paul M Romer, 1999. "Increasing Returns and Long-Run Growth," Levine's Working Paper Archive 2232, David K. Levine.
- Joseph E. Stiglitz, 1974. "Incentives and Risk Sharing in Sharecropping," Review of Economic Studies, Oxford University Press, vol. 41(2), pages 219-255.
- Joseph E. Stiglitz, 1973. "Incentives and Risk-Sharing in Sharecropping," Cowles Foundation Discussion Papers 353, Cowles Foundation for Research in Economics, Yale University.
- Patrick Bolton & Mathias Dewatripont, 2005. "Contract Theory," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262025760, July.
- Mathias Dewatripont & Patrick Bolton, 2005. "Contract theory," ULB Institutional Repository 2013/9543, ULB -- Universite Libre de Bruxelles.
- Erev, Ido & Roth, Alvin E, 1998. "Predicting How People Play Games: Reinforcement Learning in Experimental Games with Unique, Mixed Strategy Equilibria," American Economic Review, American Economic Association, vol. 88(4), pages 848-881, September.
- Rogerson, William P, 1985. "The First-Order Approach to Principal-Agent Problems," Econometrica, Econometric Society, vol. 53(6), pages 1357-1367, November.
- Hommes, Cars & Lux, Thomas, 2013. "Individual Expectations And Aggregate Behavior In Learning-To-Forecast Experiments," Macroeconomic Dynamics, Cambridge University Press, vol. 17(02), pages 373-401, March.
- Hommes, Cars & Lux, Thomas, 2008. "Individual expectations and aggregate behavior in learning to forecast experiments," Kiel Working Papers 1466, Kiel Institute for the World Economy (IfW).
- Hommes, C.H. & Lux, T., 2009. "Individual Expectations and Aggregate Behavior in Learning to Forcast Experiments," CeNDEF Working Papers 09-03, Universiteit van Amsterdam, Center for Nonlinear Dynamics in Economics and Finance.
- Marks, Robert, 1998. "Evolved perception and behaviour in oligopolies," Journal of Economic Dynamics and Control, Elsevier, vol. 22(8-9), pages 1209-1233, August.
- Robert E. Marks, "undated". "Evolved Perception and Behaviour in Oligopolies," Computing in Economics and Finance 1996 _038, Society for Computational Economics.
- Lettau, Martin, 1997. "Explaining the facts with adaptive agents: The case of mutual fund flows," Journal of Economic Dynamics and Control, Elsevier, vol. 21(7), pages 1117-1147, June.
- Arifovic, Jasmina, 1994. "Genetic algorithm learning and the cobweb model," Journal of Economic Dynamics and Control, Elsevier, vol. 18(1), pages 3-28, January.
- Timothy G. Conley & Christopher R. Udry, 2010. "Learning about a New Technology: Pineapple in Ghana," American Economic Review, American Economic Association, vol. 100(1), pages 35-69, March.
- Timothy G. Conley & Christopher R. Udry, 2005. "Learning about a new technology: pineapple in Ghana," Proceedings, Federal Reserve Bank of San Francisco.
- Timothy G. Conley & Christopher R. Udry, 2000. "Learning About a New Technology: Pineapple in Ghana," Working Papers 817, Economic Growth Center, Yale University, revised May 2004.
- Conley, T.G. & Udry, C.R., 2000. "Learning about a New Technology: Pineapple in Ghana," Papers 817, Yale - Economic Growth Center.
- Roth, Alvin E. & Erev, Ido, 1995. "Learning in extensive-form games: Experimental data and simple dynamic models in the intermediate term," Games and Economic Behavior, Elsevier, vol. 8(1), pages 164-212.
- Arifovic, Jasmina & Ledyard, John, 2007. "Call market book information and efficiency," Journal of Economic Dynamics and Control, Elsevier, vol. 31(6), pages 1971-2000, June.
- Colin Camerer & Teck-Hua Ho, 1999. "Experience-weighted Attraction Learning in Normal Form Games," Econometrica, Econometric Society, vol. 67(4), pages 827-874, July.
- Jasmina Arifovic & Michael Maschek, 2006. "Revisiting Individual Evolutionary Learning in the Cobweb Model – An Illustration of the Virtual Spite-Effect," Computational Economics, Springer;Society for Computational Economics, vol. 28(4), pages 333-354, November.
- Lux, Thomas & Schornstein, Sascha, 2005. "Genetic learning as an explanation of stylized facts of foreign exchange markets," Journal of Mathematical Economics, Elsevier, vol. 41(1-2), pages 169-196, February.
- Lux, Thomas & Schornstein, Sascha, 2002. "Genetic learning as an explanation of stylized facts of foreign exchange markets," Discussion Paper Series 1: Economic Studies 2002,29, Deutsche Bundesbank, Research Centre.
- Lux, Thomas & Schornstein, Sascha, 2003. "Genetic learning as an explanation of stylized facts of foreign exchange markets," Economics Working Papers 2003-12, Christian-Albrechts-University of Kiel, Department of Economics.
- Drew Fudenberg & David K. Levine, 1998. "The Theory of Learning in Games," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262061945, July.
- Drew Fudenberg & David K. Levine, 1996. "The Theory of Learning in Games," Levine's Working Paper Archive 624, David K. Levine.
- Rose Cunningham, 2004. "Investment, Private Information and Social Learning: A Case Study of the Semiconductor Industry," Macroeconomics 0409021, EconWPA.
- Stokey, Nancy L, 1988. "Learning by Doing and the Introduction of New Goods," Journal of Political Economy, University of Chicago Press, vol. 96(4), pages 701-717, August.
- Nancy L Stokey, 1986. "Learning-by-Doing and the Introduction of New Goods," Discussion Papers 699, Northwestern University, Center for Mathematical Studies in Economics and Management Science, revised May 1987.
- Holmstrom, Bengt & Milgrom, Paul, 1987. "Aggregation and Linearity in the Provision of Intertemporal Incentives," Econometrica, Econometric Society, vol. 55(2), pages 303-328, March.
- Bengt Holmstrom & Paul R. Milgrom, 1985. "Aggregation and Linearity in the Provision of Intertemporal Incentives," Cowles Foundation Discussion Papers 742, Cowles Foundation for Research in Economics, Yale University.
- Rebecca Achee Thornton & Peter Thompson, 2001. "Learning from Experience and Learning from Others: An Exploration of Learning and Spillovers in Wartime Shipbuilding," American Economic Review, American Economic Association, vol. 91(5), pages 1350-1368, December.
- Xiaobo Zhang & Shenggen Fan & Ximing Cai, 2002. "The Path Of Technology Diffusion: Which Neighbors To Learn From?," Contemporary Economic Policy, Western Economic Association International, vol. 20(4), pages 470-478, October.
- Harald Uhlig & Martin Lettau, 1999. "Rules of Thumb versus Dynamic Programming," American Economic Review, American Economic Association, vol. 89(1), pages 148-174, March.
- Masten, Scott E & Snyder, Edward A, 1993. "United States versus United Shoe Machinery Corporation: On the Merits," Journal of Law and Economics, University of Chicago Press, vol. 36(1), pages 33-70, April.
- Arifovic, Jasmina, 1996. "The Behavior of the Exchange Rate in the Genetic Algorithm and Experimental Economies," Journal of Political Economy, University of Chicago Press, vol. 104(3), pages 510-541, June.
- Sunil Dutta, 2002. "Revenue Recognition in a Multiperiod Agency Setting," Journal of Accounting Research, Wiley Blackwell, vol. 40(1), pages 67-83, 03.
- Jasmina Arifovic & John Ledyard, 2004. "Scaling Up Learning Models in Public Good Games," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 6(2), pages 203-238, 05.
- Vriend, Nicolaas J., 2000. "An illustration of the essential difference between individual and social learning, and its consequences for computational analyses," Journal of Economic Dynamics and Control, Elsevier, vol. 24(1), pages 1-19, January.
- Chao, Kang, 1983. "Tenure Systems in Traditional China," Economic Development and Cultural Change, University of Chicago Press, vol. 31(2), pages 295-314, January.
- Alexander Karaivanov & Robert M. Townsend, 2014. "Dynamic Financial Constraints: Distinguishing Mechanism Design From Exogenously Incomplete Regimes," Econometrica, Econometric Society, vol. 82(3), pages 887-959, 05.
- Alexander Karaivanov & Robert M. Townsend, 2013. "Dynamic Financial Constraints: Distinguishing Mechanism Design from Exogenously Incomplete Regimes," NBER Working Papers 19617, National Bureau of Economic Research, Inc.
- Caves, Richard E & Crookell, Harold & Killing, J Peter, 1983. "The Imperfect Market for Technology Licenses," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 45(3), pages 249-267, August.
- Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July. Full references (including those not matched with items on IDEAS)
When requesting a correction, please mention this item's handle: RePEc:eee:dyncon:v:34:y:2010:i:10:p:1967-1992. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dana Niculescu)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.