Arbeitspapier
Dynamic Contracts and Learning by Doing
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.
- Language
-
Englisch
- Bibliographic citation
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Series: IZA Discussion Papers ; No. 7961
- Classification
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Wirtschaft
Asymmetric and Private Information; Mechanism Design
Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
Human Capital; Skills; Occupational Choice; Labor Productivity
Labor Contracts
- Subject
-
human capital
principal agent problem
moral hazard
- Event
-
Geistige Schöpfung
- (who)
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Prat, Julien
- Event
-
Veröffentlichung
- (who)
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Institute for the Study of Labor (IZA)
- (where)
-
Bonn
- (when)
-
2014
- Handle
- Last update
-
10.03.2025, 11:45 AM CET
Data provider
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ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Prat, Julien
- Institute for the Study of Labor (IZA)
Time of origin
- 2014
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