TY - JOUR
TI - A Solvable Time-Inconsistent Principal-Agent Problem
VL - 2018
PY - 2018
DA - 2018/08/01
DO - 10.1155/2018/8512608
UR - https://doi.org/10.1155/2018/8512608
AB - We consider the dynamic contract model with time inconsistency preference of principal-agent problem to study the influence of the time inconsistency preference on the optimal effort and the optimal reward mechanism. We show that when both the principal and the agent are time-consistent, the optimal effort and the optimal reward are the decreasing functions of the uncertain factor. And when the agent is time-inconsistent, the impatience of the agent has a negative impact on the optimal contract. The higher the discount rate of the agent is, the lower the efforts provided; agents tend to the timely enjoyment. In addition, when both the principal and the agent are time-inconsistent, in a special case, their impatience can offset the impact of uncertainty factor on the optimal contract, but, in turn, their impatience will affect the contract.
JF - Discrete Dynamics in Nature and Society
SN - 1026-0226
PB - Hindawi
SP - 8512608
KW -
A2 - Macias-Diaz, Jorge E.
AU - Li, Chao
AU - Qiu, Zhijian
ER -