TY  - RPRT
ID  - eprints1855
KW  - Keywords: Principal-agent; Incentives; Risk aversion; Endogenous technolog   -  JEL Classification: D82
PB  - Università degli studi di Urbino. Facoltà di economia
UR  - http://www.econ.uniurb.it/RePEc/urb/wpaper/WP_13_04.pdf
EP  - 10
M1  - working_paper
AV  - none
SN  - 1974-4110
Y1  - 2013///
TI  - Optimal Incentives in a Principal-Agent Model with Endogenous Technology
N2  - One of the standard predictions of the agency theory is that more incentives can be given to agents with lower risk aversion. In this paper we show that this relationship may be absent or reversed when the technology is endogenous and projects with a higher e¢ ciency are also riskier. Using a modi ed version of the Holmstrom and Milgrom's (1987) framework, we obtain that lower agent's risk aversion unambiguously leads to higher incentives when the technology function linking efficiency and riskiness is elastic, while the risk aversion-incentive relation- ship can be positive when this function is rigid.
N1  - Working Papers Series in Economics, Mathematics and Statistics
A1  - Marini, Marco A.
A1  - Polidori, Paolo
A1  - Ticchi, Davide
A1  - Teobaldelli, Désirée
ER  -