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26.04. BGSE Micro Workshop: Daniel Bird

BGSE Micro Workshop with Daniel Bird (Tel-Aviv University)

Event details
What
  • BGSE Workshop
When Apr 26, 2017
from 12:00 to 13:00
Where Room 0.017
Contact Name Stephan Lauermann
Contact Email
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Topic

Dynamic Nonmonetary Incentives

 

Abstract

We study a principal-agent interaction where investments and rewards arrive stochastically over time, and are privately observed by the agent. Investments (costly for the agent, bene cial for the principal) can be concealed by the agent. Rewards (bene cial for the agent, costly for the principal) can be forbidden by the principal. We ask how rewards should be used and which investments incentivized. We identify the unique optimal mechanism and analyze the dynamic investment and compensation policies. When all rewards are identical, the unique optimal way to provide incentives is by a "carte-blanche" to pursue all rewards arriving in a predetermined timeframe.

 

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