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Justifying the First-Order Approach to Principal-Agent Problems
Abstract
It is of interest to know when the incentive compatibility conditio n in principal-agent problems can be replaced by the condition that the agent's expected utility be stationary in effort. The Mirrlees-Rogerson conditions do not work if the principal can observe more than one observable statistic. Also, the Mirrlees-Rogerson assumption that the distribution function of output is convex in the agent's action is unsatisfactory even in the context of the basi c model; it is too restrictive. The paper presents a suite of conditio ns that are applicable to the multistatistic case and replaces the objectionable convex distribution function assumption. Copyright 1988 by The Econometric Society.
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Metadata
- Authors
- Jewitt, I.
- Venue
- Econometrica
- Publisher
- JSTOR
- Published
- 1988-09
- Volume
- 56
- Issue
- 5
- Pages
- 1177
- ISSN
- 0012-9682 (ISSN-L)
- OpenAlex
- W2074555403
- Cited by
- 511
- References
- 1
- FWCI
- 8.14
- Type
- journal article
- Language
- en
- Open access
- closed
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