ReportTitle:Project Management: Optimal Contracts with the Inclusion of Observable Actions in Generalized Moral Hazard Problems
Reporter(Institution):Yu Chen(Nanjing University)
Time:02:00.pm,29th April, 2016Location:B-201, Building of Economics & Management, JiulonghuCampus
Abstract:We provide a generalized model concerning the one-shot pure-strategy moral hazard contracting game with the inclusion of observable actions as well as unobservable actions. The outcome, action, and reward spaces are assumed to be all metrizable and compact and allowed to be uncountable and multi-dimensional. We find that employing observable-action-and-outcome-contingent contracts is strategically equivalent to employing pure outcome contingent contracts, as long as the principal can specify and enforce individual rational observable actions to the agent. The space of feasible contracts is assumed to be (sequentially) closed under the topology of pointwise convergence. We do not need any other a priori technical assumptions on the contract function space. We then propose conditions under
which the solution to such a principal-agent problem exists.
