Incentives for Boundedly Rational Agents
This paper develops a theoretical framework for analyzing incentive schemes under bounded rationality. It starts from a standard principal-agent model and then superimposes an assumption of boundedly rational behavior on the part of the agent. Boundedly rational behavior is modeled as an explicit optimization procedure which combines gradient dynamics with a specific form of social learning called imitation of scope.
|Date of creation:||2001|
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NBER Working Papers
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