Managerial Utility in DSGE Model

Kód výsledku v IS VaVaI

<a href="https://www.isvavai.cz/riv?ss=detail&h=RIV%2F49777513%3A23510%2F17%3A43949396" target="_blank" >RIV/49777513:23510/17:43949396 - isvavai.cz</a>

Výsledek na webu

<a href="http://www.lef-tul.cz/sekce/LEF_2017.pdf" target="_blank" >http://www.lef-tul.cz/sekce/LEF_2017.pdf</a>

DOI - Digital Object Identifier

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Jazyk výsledku

angličtina

Název v původním jazyce

Managerial Utility in DSGE Model

Popis výsledku v původním jazyce

In the paper the new DSGE model is developed. All contemporary used models are built on households’ utility maximization and firms’ profit maximization. There is assumed that the households are owners of the firms and instruct managers to fulfil the maximum of profit. In our model there are two utility maximization problems, the first one is standard households’ dynamic problem and the second one is static managers’ utility maximization under constraint of exhausting the whole production by the owners of labour and capital, i.e. households. The arguments of managerial utility function are the amount of labour and capital hired. A new factor of production has to be included in the production function. It is the managers’ effort as a specific factor of production but this effort is not awarded at all as in presented basic model or the award for managers could be negligible to their marginal product. The first order condition of this problem compares the marginal utility from hired factor with the cost for factor payment. The key feature of the model is then overpayment of factors of production above their marginal productivity. Model completely separates the decision making of households and firms while the profit maximization approach assumes the collaboration between them.

Název v anglickém jazyce

Managerial Utility in DSGE Model

Popis výsledku anglicky

In the paper the new DSGE model is developed. All contemporary used models are built on households’ utility maximization and firms’ profit maximization. There is assumed that the households are owners of the firms and instruct managers to fulfil the maximum of profit. In our model there are two utility maximization problems, the first one is standard households’ dynamic problem and the second one is static managers’ utility maximization under constraint of exhausting the whole production by the owners of labour and capital, i.e. households. The arguments of managerial utility function are the amount of labour and capital hired. A new factor of production has to be included in the production function. It is the managers’ effort as a specific factor of production but this effort is not awarded at all as in presented basic model or the award for managers could be negligible to their marginal product. The first order condition of this problem compares the marginal utility from hired factor with the cost for factor payment. The key feature of the model is then overpayment of factors of production above their marginal productivity. Model completely separates the decision making of households and firms while the profit maximization approach assumes the collaboration between them.

Druh

D - Stať ve sborníku

CEP obor

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OECD FORD obor

50201 - Economic Theory

Projekt

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Návaznosti

S - Specificky vyzkum na vysokych skolach

Rok uplatnění

2017

Kód důvěrnosti údajů

S - Úplné a pravdivé údaje o projektu nepodléhají ochraně podle zvláštních právních předpisů

Název statě ve sborníku

Proceedings of the 13th International Conference Liberec Economic Forum 2017

ISBN

978-80-7494-349-2

ISSN

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e-ISSN

neuvedeno

Počet stran výsledku

8

Strana od-do

63-70

Název nakladatele

Technical University of Liberec

Místo vydání

Liberec

Místo konání akce

Liberec

Datum konání akce

11. 9. 2017

Typ akce podle státní příslušnosti

EUR - Evropská akce

Kód UT WoS článku

000426486500007