Moral hazard with limited liability: random-variable formulation and optimal contract structures

DOI10.1016/J.GEB.2021.01.002zbMATH Open1458.91120OpenAlexW3123493709MaRDI QIDQ1995493FDOQ1995493

Authors: Yanyan Li 

Publication date: 23 February 2021

Published in: Games and Economic Behavior (Search for Journal in Brave)

Full work available at URL: https://doi.org/10.1016/j.geb.2021.01.002

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zbMATH Keywords

first-order approachmoral hazardlimited liabilitypay-for-performancerisk-neutral agency

Mathematics Subject Classification ID

Contract theory (moral hazard, adverse selection) (91B41)

Cites Work

• On the moral hazard problem without the first-order approach
• Limited liability and incentive contracting with ex-ante action choices
• Existence and monotonicity of solutions to moral hazard problems
• Moral Hazard and the Optimality of Debt
• Moral hazard and the spanning condition without the first-order approach
• A general solution method for moral hazard problems
• From Pigou to extended liability: on the optimal taxation of externalities under imperfect financial markets

Cited In (14)

• Moral hazard with bounded payments
• Large risks, limited liability, and dynamic moral hazard
• Optimal contract under double moral hazard and limited liability
• Dynamic costs and moral hazard: a duality-based approach
• Incentive-compatibility, limited liability and costly liquidation in financial contracting
• Technical note: Impact of inventory on quota-bonus contracts with rent sharing
• Bounds on the welfare loss from moral hazard with limited liability
• Moral hazard with non-additive uncertainty: when are actions implementable?
• Limited liability and the underlying-asset constraint: On the use of share-derivative contracts to resolve agency problems
• The existence of an optimal deterministic contract in moral hazard problems
• Informed-principal problem with moral hazard, risk neutrality, and no limited liability
• Renegotiating moral hazard contracts under limited liability and monotonicity
• Optimal technology design
• A note on optimal contracting with public \textit{ex post} information under limited liability

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