Szentes, Balázs (LSE)
Optimal Monitoring Design
This paper considers a Principal–Agent model with hidden action in which the Principal can monitor the Agent by acquiring independent signals conditional on effort at a constant marginal cost. The Principal aims to implement a target effort level at minimal cost. The main result of the paper is that the optimal information-acquisition strategy is a two-threshold policy and, consequently, the equilibrium contract specifies two possible wages for the Agent. This result provides a rationale for the frequently observed single-bonus wage contracts.
(This is a joint work with George Georgiadis)
The talk is
held in English!
Az előadás
nyelve angol!
Date: Oct 19, Tuesday 4:15pm
Place: BME, Building „Q”, Room
QBF13