Production priorities in dynamic relationships
The result's identifiers
Result code in IS VaVaI
<a href="https://www.isvavai.cz/riv?ss=detail&h=RIV%2F67985998%3A_____%2F20%3A00532805" target="_blank" >RIV/67985998:_____/20:00532805 - isvavai.cz</a>
Result on the web
<a href="https://doi.org/10.3982/TE2963" target="_blank" >https://doi.org/10.3982/TE2963</a>
DOI - Digital Object Identifier
<a href="http://dx.doi.org/10.3982/TE2963" target="_blank" >10.3982/TE2963</a>
Alternative languages
Result language
angličtina
Original language name
Production priorities in dynamic relationships
Original language description
We characterise optimal contracts in a dynamic principal-agent model of joint production in which project opportunities are heterogenous, utility from these projects is non-transferable and the agent has the option to quit the relationship at any time. In order to demand the production of projects that benefit her but not the agent, the principal must commit to produce projects that benefit the agent in the future. Production at all stages of the relationship is ordered by projects' cost-effectiveness, which is their efficiency in transferring utility between the principal and the agent: cost-effective demands impose relatively low costs on the agent, and cost-effective compensation imposes relatively low costs on the principal. Over time, optimal contracts become more generous towards the agent by adding commitments to less cost-effective compensation. In turn, because this new compensation cannot be profitably exchanged against less cost-effective demands, the principal narrows the scope of her demands.
Czech name
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Czech description
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Classification
Type
J<sub>imp</sub> - Article in a specialist periodical, which is included in the Web of Science database
CEP classification
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OECD FORD branch
50201 - Economic Theory
Result continuities
Project
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Continuities
I - Institucionalni podpora na dlouhodoby koncepcni rozvoj vyzkumne organizace
Others
Publication year
2020
Confidentiality
S - Úplné a pravdivé údaje o projektu nepodléhají ochraně podle zvláštních právních předpisů
Data specific for result type
Name of the periodical
Theoretical Economics
ISSN
1933-6837
e-ISSN
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Volume of the periodical
15
Issue of the periodical within the volume
3
Country of publishing house
US - UNITED STATES
Number of pages
29
Pages from-to
861-889
UT code for WoS article
000549863900001
EID of the result in the Scopus database
2-s2.0-85087449734