Multiagent Incentive Contracts

Multiagent Incentive Contracts
Author: Qi Luo
Publisher:
Total Pages: 17
Release: 2019
Genre:
ISBN:

Incentive contracts with multiple agents is a classical decentralized decision-making problem with asymmetric information. Contract design aims to incentivize noncooperative agents to act in the principal's interest over a planning horizon. We extend the single-agent incentive contract to a multiagent setting with history-dependent terminal conditions. Our contributions include: (a) Finding sufficient conditions for the existence of optimal multiagent incentive contracts and conditions under which they form a unique Nash Equilibrium; (b) Showing that the optimal multiagent incentive contracts can be solved by a Hamilton-Jacobi-Bellman (HJB) equation with equilibrium constraints; (c) Proposing a backward iterative algorithm to solve the problem.

Contract Theory

Contract Theory
Author: Patrick Bolton
Publisher: MIT Press
Total Pages: 746
Release: 2004-12-10
Genre: Business & Economics
ISBN: 0262257963

A comprehensive introduction to contract theory, emphasizing common themes and methodologies as well as applications in key areas. Despite the vast research literature on topics relating to contract theory, only a few of the field's core ideas are covered in microeconomics textbooks. This long-awaited book fills the need for a comprehensive textbook on contract theory suitable for use at the graduate and advanced undergraduate levels. It covers the areas of agency theory, information economics, and organization theory, highlighting common themes and methodologies and presenting the main ideas in an accessible way. It also presents many applications in all areas of economics, especially labor economics, industrial organization, and corporate finance. The book emphasizes applications rather than general theorems while providing self-contained, intuitive treatment of the simple models analyzed. In this way, it can also serve as a reference for researchers interested in building contract-theoretic models in applied contexts.The book covers all the major topics in contract theory taught in most graduate courses. It begins by discussing such basic ideas in incentive and information theory as screening, signaling, and moral hazard. Subsequent sections treat multilateral contracting with private information or hidden actions, covering auction theory, bilateral trade under private information, and the theory of the internal organization of firms; long-term contracts with private information or hidden actions; and incomplete contracts, the theory of ownership and control, and contracting with externalities. Each chapter ends with a guide to the relevant literature. Exercises appear in a separate chapter at the end of the book.

The Theory of Incentives

The Theory of Incentives
Author: Jean-Jacques Laffont
Publisher: Princeton University Press
Total Pages: 436
Release: 2009-12-27
Genre: Business & Economics
ISBN: 1400829453

Economics has much to do with incentives--not least, incentives to work hard, to produce quality products, to study, to invest, and to save. Although Adam Smith amply confirmed this more than two hundred years ago in his analysis of sharecropping contracts, only in recent decades has a theory begun to emerge to place the topic at the heart of economic thinking. In this book, Jean-Jacques Laffont and David Martimort present the most thorough yet accessible introduction to incentives theory to date. Central to this theory is a simple question as pivotal to modern-day management as it is to economics research: What makes people act in a particular way in an economic or business situation? In seeking an answer, the authors provide the methodological tools to design institutions that can ensure good incentives for economic agents. This book focuses on the principal-agent model, the "simple" situation where a principal, or company, delegates a task to a single agent through a contract--the essence of management and contract theory. How does the owner or manager of a firm align the objectives of its various members to maximize profits? Following a brief historical overview showing how the problem of incentives has come to the fore in the past two centuries, the authors devote the bulk of their work to exploring principal-agent models and various extensions thereof in light of three types of information problems: adverse selection, moral hazard, and non-verifiability. Offering an unprecedented look at a subject vital to industrial organization, labor economics, and behavioral economics, this book is set to become the definitive resource for students, researchers, and others who might find themselves pondering what contracts, and the incentives they embody, are really all about.

Economic Analysis of Information and Contracts

Economic Analysis of Information and Contracts
Author: Gerald A. Feltham
Publisher: Springer Science & Business Media
Total Pages: 412
Release: 2012-12-06
Genre: Business & Economics
ISBN: 9400926677

The three coeditors knew John Butterworth for many years and had worked closely with him on a number of research projects. We respected him as a valuable colleague and friend. We were greatly saddened by his untimely death. This book is an attempt to remember him. We dedicate the volume to John with thanks for the contributions he made to our research, to the Faculty of Commerce and Business Administration at the University of British Columbia, and to the accounting profession. This volume contains twelve invited papers on the general topic of the economic theory of information and contracts. We asked leading scholars who had known John to contribute papers. The response was very gratifying. The authors provided us with new strong research papers that should make a lasting contribution to the accounting and information economics research literature, and make us all proud to have put this volume together. The research papers in the volume are in three sections: information evaluation in multi person conte)l:ts; contracting in agencies under moral hazard; and contracting in agencies with private information. We begin part I with Jerry Feltham's review of John Butterworth's pioneering contributions to the accounting and information economics literature. This is followed by an introduction to the papers in the volume and the papers themselves.

Economics of Accounting

Economics of Accounting
Author: Peter Ove Christensen
Publisher: Springer Science & Business Media
Total Pages: 675
Release: 2006-03-30
Genre: Business & Economics
ISBN: 0387265996

This book provides an integrated, technical exposition of key concepts in agency theory, with particular emphasis on analyses of the economic consequences of the characteristics of contractible performance measures, such as accounting reports. It provides a succinct source for learning the fundamentals of the economics of incentives. It will appeal to accounting researchers as well as those in other disciplines who are interested in the economics of management incentives.

The Japanese Firm

The Japanese Firm
Author: Masahiko Aoki
Publisher: Oxford University Press, USA
Total Pages: 426
Release: 1994
Genre: Business & Economics
ISBN: 9780198292159

Written by prominent scholars in the field, this is an account of the Japanese firm and its sources of success. Containing both theoretical and empirical work, the book ranges across labour and information economics, finance, organizational theory, and others.

On Incentives to Help in Multi-agent Situations

On Incentives to Help in Multi-agent Situations
Author: Hideshi Itō
Publisher:
Total Pages: 50
Release: 1988
Genre: Incentives in industry
ISBN:

This paper concerns moral hazard problems in multi-agent situations where cooperation is an issue. Each agent chooses his own effort, which improves stochastically the outcome of his own job. Agents also choose the amount of 'help' to extend to other agents, which improves the performance of other agents. By selecting appropriate compensation schemes, the principal can design the task structure of the firm: The principal may prefer an unambiguous division labor, where each agent is inclined not to help other agents and specializes in his own job. Or the principal may prefer teamwork where each agent is motivated to help other agents. The analysis identifies two important determinants in choosing the optimal task structure; the effect of 'interpersonal interaction' and the attitude of the agents in providing 'small' amounts of help.