Header

UZH-Logo

Maintenance Infos

On the Notion of the First Best in Standard Hidden Action Problems


Ewerhart, Christian; Nitzsche, Christoph (2005). On the Notion of the First Best in Standard Hidden Action Problems. Working paper series / Institute for Empirical Research in Economics No. 229, University of Zurich.

Abstract

It is well known that ex-ante randomization can improve uponnsecond best contracts in principal-agent problems. In this note, we show that even the first-best can be dominated by a random contract. Our example isncast in a standard textbook set-up with two effort levels and two states of nature.

Abstract

It is well known that ex-ante randomization can improve uponnsecond best contracts in principal-agent problems. In this note, we show that even the first-best can be dominated by a random contract. Our example isncast in a standard textbook set-up with two effort levels and two states of nature.

Statistics

Downloads

434 downloads since deposited on 29 Nov 2011
10 downloads since 12 months
Detailed statistics

Additional indexing

Item Type:Working Paper
Communities & Collections:03 Faculty of Economics > Department of Economics
Working Paper Series > Institute for Empirical Research in Economics (former)
Dewey Decimal Classification:330 Economics
Language:English
Date:February 2005
Deposited On:29 Nov 2011 22:32
Last Modified:07 Dec 2017 10:10
Series Name:Working paper series / Institute for Empirical Research in Economics
ISSN:1424-0459
Official URL:http://www.econ.uzh.ch/wp.html

Download

Download PDF  'On the Notion of the First Best in Standard Hidden Action Problems'.
Preview
Filetype: PDF
Size: 214kB