Deterministic versus stochastic mechanisms in principal-agent models

This paper shows that, contrary to what is generally believed, decreasing concavity of the agent's utility function with respect to the screening variable is not sufficient to ensure that stochastic mechanisms are suboptimal. The paper demonstrates, however, that they are suboptimal whenever the optimal deterministic mechanism exhibits no bunching. This is the case for most applications of the theory and therefore validates the literature's usual focus on deterministic mechanisms.     

Distributions for the first-order approach to principal-agent problems

Summary. The first-order approach is a technical shortcut widely used in agency problems. The best known set of sufficient conditions for its validity are due to Mirrlees and Rogerson and require that the distribution function is convex in effort and has a likelihood ratio increasing in output. Only one nontrivial example was so far known to satisfy both properties. This note provides two rich families of examples displaying both properties. Received: December 4, 2000; revised version: December 10, 2001     

The principal-agent problem with a satisficing agent

The principal-agent problem is formulated with an expected utility maximizing principal and a satisficing agent. If the outcome set is finite and if there is only one aspiration level, then there are always optimal incentive schemes which can be represented by vectors having only the unique aspiration level and zero as coordinate values. The relation between the monotone likelihood ratio property and the monotonicity of optimal incentive schemes is investigated. This is done not only in the above model, but also in a continuous model with outcomes in an interval, which is much more interesting.     

Theories of behavior in principal-agent relationships with hidden action

In a laboratory experiment, we investigate behavior in a principal-agent situation with moral hazard. We evaluate the predictive success of two theories. One is the standard agency theory, which assumes that the agent will accept any contract offer that satisfies his participation constraint, typically requiring zero expected utility. The other is the “fair-offer” theory suggested by Keser and Willinger [2000. Principals’ principles when agents’ actions are hidden. International Journal of Industrial Organization 18 (1), 163-185], which requires that the principal provide full insurance against losses to the agent and leave him a share of at most 50% of the generated surplus. The treatment variable of our experiment is the cost of effort. As effort costs increase, expected net surplus of a contract decreases. We observe that fair-offer theory generally predicts observed contract offers better than standard agency theory. However, the predictive success of the fair-offer theory decreases, while the one of standard agency theory increases with decreasing expected net surplus.     

On the first-order approach in principal-agent models with hidden borrowing and lending

We provide sufficient conditions for the validity of the first-order approach for two-period dynamic moral hazard problems where the agent can save and borrow secretly. The first-order approach is valid if the following conditions hold: (i) the agent has non-increasing absolute risk aversion utility (NIARA), (ii) the output technology has monotone likelihood ratios (MLR), and (iii) the distribution function of output is log-convex in effort (LCDF). Moreover, under these three conditions, the optimal contract is monotone in output. We also investigate a few possibilities of relaxing these requirements.     

The role of boundary solutions in principal-agent problems of the Holmström-Milgrom type

The paper extends the Holmström-Milgrom [B. Holmström, P. Milgrom, Aggregation and linearity in the provision of intertemporal incentives, Econometrica 55 (1987) 303-328] analysis of intertemporal incentive provision to allow for the implementation of actions on the boundary of the feasible set. Boundary actions provide the principal with some freedom in choosing incentive schemes. This can be used to reduce premia. The paper characterizes optimal incentive schemes for the continuous-time Brownian-motion model and its discrete-time approximations. Linearity of incentive schemes in “accounts” is confirmed. However, for models with effort costs depending only on mean returns, the availability of boundary actions destroys the linearity of optimal incentive schemes in profits.     

Evidence on the political principal-agent problem from voting on public finance for concert halls

Principal-agent problems can arise when preferences of voters are not aligned with preferences of political representatives. Often the consequence of the political principal-agent problem is political catering to special interests. In this paper I provide examples of principal-agent problems regarding public spending. The examples concern construction or extension of concert halls in two German cities. Resistance to public funding for the concert halls was particularly strong in electoral districts with large constituencies on the left. The evidence indicates that political representatives were more bourgeois than their constituencies. In the cases studied asymmetric information did not prevail and voters were able to discipline their representatives through referenda that countered the results of voting by political representatives.     

Optimal contract mechanisms for principal-agent problems with moral hazard and adverse selection

Summary We examine the problem of incentive compatibility and mechanism design for incomplete information principal-agent problems. Allowing for risk aversion on the part of the principal and agent, we show the existence of an optimal, incentive compatible contract selection mechanism for the principal under conditions of moral hazard and adverse selection. Since we assume that the contract set is a function space of state contingent contracts, and that the set of agent types is uncountable, the set of contract selection mechanisms becomes infinite dimensional. Hence, novel existence arguments are required. Our existence result extends those of Grossman and Hart [10] and Page [23] to an infinite dimensional setting with incomplete information.     

Multitask principal-agent problems: Optimal contracts, fragility, and effort misallocation

We analyze a tractable class of multitask principal-agent problems, such as the one faced by a firm with a manager overseeing several projects. We allow for tasks to be complements or substitutes. We avoid the problems associated with the first-order approach by directly characterizing the shape of the agent's indirect utility function, which exhibits a convex then concave shape in effort. We identify a new source of allocational inefficiency across tasks: excessive concentration, and its consequence, insufficient risk taking. Optimal incentive schemes in our environment are generally “fragile”: small changes in fundamentals can cause the agent's effort to collapse.     

A state-contingent production approach to principal-agent problems with an application to point-source pollution control

Two basic representations of principal-agent relationships, the ‘state-space' and ‘parameterized distribution' formulations, have emerged. Although the state-space formulation appears more natural, analytical studies using this formulation have had limited success. This paper develops a state-space formulation of the moral-hazard problem using a general representation of production under uncertainty. A closed-form solution for the agency-cost problem is derived. Comparative-static results are deduced. Next we solve the principal's problem of selecting the optimal output given the agency-cost function. The analysis is applied to the problem of point-source pollution control.     

Endogenous market structures and contract theory: Delegation, principal-agent contracts, screening, franchising and tying

I study the role of unilateral strategic contracts for firms active in markets with price competition and endogenous entry. Traditional results change substantially when the market structure is endogenous rather than exogenous. They concern (1) contracts of managerial delegation to non-profit maximizers, (2) incentive principal-agent contracts in the presence of moral hazard on cost-reducing activities, (3) screening contracts in case of asymmetric information on the productivity of the managers, (4) vertical contracts of franchising in case of hold-up problems and (5) tying contracts by monopolists competing also in secondary markets. Firms use always these contracts to strengthen price competition and manage to obtain positive profits in spite of free entry.     

提升农村消费需求的策略研究

中国是农业大国,但农村消费对经济的拉动不足,研究提升农村居民消费需求,对加快社会主义新农村建设、真正落实拉动内需具有重要的意义。分析了当前农村的消费水平现状以及存在的问题,并提出了扩大农村消费的对策思路。     

西部城市化基本策略研究

城市化是西部大开发的重要途径之一，西部城市化应该选择区域城市化的道路，其基本策略有网络状城市群体系，带状城市体系以及点状城市中心等。在西部大开发过程中，要加速西部城市化的进程，需要进行制度和思路创新，形成多元化的投资格局，让农民企业家和中小企业家成为城镇建设的创业者，通过相应的配套社会政策改革进行科学的管理。     

Nash Equilibria in Pure Strategies

We consider an n ‐person non‐zero‐sum non‐cooperative game in normal form, where the strategy sets are some closed intervals of the real line. It is shown that if the pay‐off functions are continuous on the whole space and if for each pay‐off function the smallest local maximum in the strategy variable is a global maximum, then the game possesses a pure strategy Nash equilibrium.     

动量和反转投资策略在我国股市中的实证分析

本文采用沪深两市1995年前上市的股票作为样本,发现我国股市中也存在明显的动量和反转盈利,且两种效应的强弱与大盘走势相关,当市场为牛市特征时,动量效应明显强于反转效应;当市场为熊市特征时,则反之.经典的CAPM模型无法解释动量和反转盈利的来源,检验表明投资者对不同类型信息的不同反应方式,可以很好解释我国股市中的动量和反转盈利,利用上述检验结果还可以解释我国股市中许多有趣的特征.     

试论我国电影产业的市场运营战略

中国电影市场在2002年实行了院线制度改革,加强了电影市场运作的规范性,电影产业的产值也在不断增加,这说明了政策推动的有力和市场调节作用的加强。由于电影产业具有明显的市场需求导向性,因此,电影市场的分布并不均衡。我国电影产业尽管取得高速发展,但实际上我国电影市场的潜力还没有完全被发掘出来。通过对我国电影产业的状况分析,提出了关于我国电影产业资本运营的建议。     

试论西部企业发展的名牌战略

西部大开发最终目标的实现必须依赖于西部企业的充分发展。名牌战略是企业战略体系构成的核心 ,是实施战略管理的首选战略 ,加强对名牌战略的理论研究和实践探讨 ,对于企业、经济的发展具有十分重要的意义。鉴于此 ,文章探讨了名牌战略的若干理论问题并对西部企业如何实施名牌战略进行了一些有益探索。     

商业银行支行管理策略研究

商业银行的主要目标是追求利润的最大化,其经营管理的核心应是经济效益的优化.因此,本文围绕这一核心,分别从管理的策略、指导思想和集约经营等方面,对商业银行支行在经营管理中的实际问题作出探析.     

我国网络银行集约化经营之策略

我国的网络银行是在传统银行基础上发展起来的集约化经营。本分析了网络银行集约化经营过程中存在的问题,并提出我国网络银行发展集约化的策略：加强宏观调控与规范管理;实现支付的安全化与标准化;开展业务创新与便利服务;建立和巩固银行顾客网络。