Program > Papers by author > Querou Nicolas

Monday 12
A1 - Asymmetric and Private Information, Mechanism Design
Chair: Rahel Jigi Kitessa
› 11:30 - 11:55 (25min)
› Room 003 - G. Dandelot
Motivating versus Funding
Nicolas Querou  1@  , Antoine Soubeyran  2@  , Raphael Soubeyran  3@  
CNRS : UMR5474
Aix-Marseille Université - AMU
Institut national de la recherche agronomique (INRA) : UMR1135

We consider a moral hazard problem where the agent's effort induces monetary costs, and limits on the agent's resource restrict his capability to exert effort. The optimal contract is, in some cases, a sharing contract and the principal provides the agent with an up-front financial transfer. Moreover, whereas incentives and transfer to the agent are substitutes in the case where he has sucient wealth, they are complements when his wealth is limited. Also, if the agent can consume some of his wealth at the outset of the contractual arrangement, he can get all the surplus of the relationship.

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