Samenvatting
In this principal-agent moral hazard model, the agent's reference point is determined by rational expectations (Köszegi & Rabin, 2006). The principal (she) takes into account that by designing the incentive contract for the agent (he), the stochastic reference point of the agent is determined. Based on the incentive contract, he agent expects to provide some effort, which he will follow through in a personal equilibrium (PE). As several personal equilibria might exist, the principal, being able to strategically influence the expectations of the agent can choose the PE which is most beneficial for her. This leads to high effort for lower payments compared to the standard model.
Originele taal-2 | English |
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Titel | Young Researcher Workshop at the Conference of the Society for the Advancement of Behavioral Economics, Lake Tahoe |
Status | Published - 2014 |
Evenement | Society for the Advancement of Behavioral Economics, SABE 2014 - Lake Tahoe, United States Duur: 21 jul 2014 → 24 jul 2014 |
Conference
Conference | Society for the Advancement of Behavioral Economics, SABE 2014 |
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Land/Regio | United States |
Stad | Lake Tahoe |
Periode | 21/07/14 → 24/07/14 |