The theory of incentives : the principal-agent model / Jean-Jacques Laffont and David Martimort.
2002
HB171 .L34 2002 (Map It)
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Details
Title
The theory of incentives : the principal-agent model / Jean-Jacques Laffont and David Martimort.
Published
Princeton, N.J. ; Oxford : Princeton University Press, [2002]
Copyright
©2002
Call Number
HB171 .L34 2002
ISBN
0691091838 (alk. paper)
0691091846 (pbk. : alk. paper)
0691091846 (pbk. : alk. paper)
Description
xii, 421 pages : illustrations ; 26 cm
System Control No.
(OCoLC)47990008
Bibliography, etc. Note
Includes bibliographical references (pages [399]-412) and indexes.
Record Appears in
Added Author
Table of Contents
Foreword
Introduction
1
1
Incentives in Economic Thought
7
1.1Adam Smith and Incentive Contracts in Agriculture
8
1.2Chester Barnard and Incentives in Management
11
1.3Hume, Wicksell, Groves: The Free-Rider Problem
14
1.4Borda, Bowen, Vickrey: Incentives in Voting
15
1.5Leon Walras and the Regulation of Natural Monopolies
18
1.6Knight, Arrow, Pauly: Incentives in Insurance
18
1.7Sidgwick, Vickrey, Mirrlees: Redistribution and Incentives
20
1.8Dupuit, Edgeworth, Pigou: Price Discrimination
22
1.9Incentives in Planned Economies
23
1.10Leonid Hurwicz and Mechanism Design
25
1.11Auctions
27
2
The Rent Extraction-Efficiency Trade-Off
28
2.1The Basic Model
32
2.2The Complete Information Optimal Contract
33
2.3Incentive Feasible Menu of Contracts
36
2.4Information Rents
39
2.5The Optimization Program of the Principal
40
2.6The Rent Extraction-Efficiency Trade-Off
41
2.7The Theory of the Firm Under Asymmetric Information
46
2.8Asymmetric Information and Marginal Cost Pricing
48
2.9The Revelation Principle
48
2.10A More General Utility Function for the Agent
51
2.11Ex Ante versus Ex Post Participation Constraints
57
2.12Commitment
63
2.13Stochastic Mechanisms
65
2.14Informative Signals to Improve Contracting
68
2.15Contract Theory at Work
72
3
Incentive and Participation Constraints with Adverse Selection
82
3.1More than Two Types
86
3.2Multidimensional Asymmetric Information
93
3.3Type-Dependent Participation Constraint and Countervailing Incentives
101
3.4Random Participation Constraint
115
3.5Limited Liability
118
3.6Audit Mechanisms and Costly State Verification
121
3.7Redistributive Concerns and the Efficiency-Equity Trade-Off
130
4
Moral Hazard: The Basic Trade-Offs
145
4.1The Model
148
4.2Risk Neutrality and First-Best Implementation
153
4.3The Trade-Off Between Limited Liability Rent Extraction and Efficiency
155
4.4The Trade-Off Between Insurance and Efficiency
158
4.5More than Two Levels of Performance
163
4.6Informative Signals to Improve Contracting
167
4.7Moral Hazard and the Theory of the Firm
172
4.8Contract Theory at Work
174
4.9Commitment Under Moral Hazard
184
5
Incentive and Participation Constraints with Moral Hazard
187
5.1More than Two Levels of Effort
191
5.2The Multitask Incentive Problem
203
5.3Nonseparability of the Utility Function
226
5.4Redistribution and Moral Hazard
232
6
Nonverifiability
240
6.1No Contract at Date 0 and Ex Post Bargaining
242
6.2Incentive Compatible Contract
244
6.3Nash Implementation
246
6.4Subgame-Perfect Implementation
256
6.5Risk Aversion
261
7
Mixed Models
265
7.1Adverse Selection Followed by Moral Hazard
269
7.2Moral Hazard Followed by Adverse Selection
294
7.3Moral Hazard Followed by Nonverifiability
298
8
Dynamics under Full Commitment
303
8.1Repeated Adverse Selection
307
8.2Repeated Moral Hazard
319
8.3Constraints by Transfers: The Role of Implicit Incentives
342
9
Limits and Extensions
347
9.1Informed Principal
351
9.2Limits to Enforcement
360
9.3Dynamics and Limited Commitment
364
9.4The Hold-Up Problem
370
9.5Limits to the Complexity of Contracts
375
9.6Limits in the Action Space
387
9.7Limits to Rational Behavior
391
9.8Endogenous Information Structures
395
References
399
Author Index
413
Subject Index
417