Contract Design Beyond Hidden-Actions
Abstract
In the classical principal-agent hidden-action contract model, a principal delegates the execution of a costly task to an agent. In order to complete the task, the agent chooses an action from a set of actions, where each potential action is associated with a cost and a success probability to accomplish the task. To incentivize the agent to exert effort, the principal can commit to a contract, which is the amount of payment based on the task’s success but not on the hidden-action chosen by the agent.
Fields of Study & Subjects
Auction Theory and Applications
Law
Economics
and Judicial Systems
Game Theory and Applications
Publication details
- Journal / source
- Society for Industrial and Applied Mathematics eBooks
- Pages
- 2113–2133
- Publication date
- 1 January 2026
- Language
- EN