Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/93343
Authors: 
Prat, Julien
Year of Publication: 
2014
Series/Report no.: 
IZA Discussion Paper 7961
Abstract: 
This paper studies the design of optimal contracts in dynamic environments where agents learn by doing. We derive a condition under which contracts are fully incentive compatible. A closed-form solution is obtained when agents have CARA utility. It shows that human capital accumulation strengthens the power of incentives and allows the principal to provide the agent with better insurance against transitory risks.
Subjects: 
human capital
principal agent problem
moral hazard
JEL: 
D82
D83
J24
J41
Document Type: 
Working Paper

Files in This Item:
File
Size
347.96 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.