Incentives in Principal-Agent Relationships | Zendy

David E. M. Sappington | Zendy

AI Assistant Blog Pricing

Home ZAIA Blog

Open Access

Incentives in Principal-Agent Relationships

Author(s) -

David E. M. Sappington

Publication year - 1991

Publication title -

the journal of economic perspectives

Language(s) - English

Resource type - Journals

SCImago Journal Rank - 9.614

H-Index - 196

eISSN - 1944-7965

pISSN - 0895-3309

DOI - 10.1257/jep.5.2.45

Subject(s) - incentive , principal (computer security) , principal–agent problem , task (project management) , agency (philosophy) , microeconomics , economics , business , computer science , finance , sociology , management , computer security , corporate governance , social science

This article identifies some of the major issues that have been examined in the literature on incentives. The article begins by discussing the frictions that lie at the heart of incentive problems. Next, the principal's optimal response to these frictions is explored, taking as given the characteristics of the agents with whom the principal interacts in a nonrepeated setting. The design of individualized contracts, contests, and tournaments is analyzed. Then, the principal's task of selecting the best agent is addressed, and repeated agency relationships are considered.

The content you want is available to Zendy users.

Already have an account? Click here to sign in.

Having issues? You can contact us here

Accelerating Research