eprintid: 1855
rev_number: 10
eprint_status: archive
userid: 6
dir: disk0/00/00/18/55
datestamp: 2013-10-28 10:47:23
lastmod: 2013-10-28 10:47:23
status_changed: 2013-10-28 10:47:23
type: monograph
metadata_visibility: show
creators_name: Marini, Marco A.
creators_name: Polidori, Paolo
creators_name: Ticchi, Davide
creators_name: Teobaldelli, Désirée
creators_id: 
creators_id: 
creators_id: davide.ticchi@imtlucca.it
creators_id: 
title: Optimal Incentives in a Principal-Agent Model with Endogenous Technology
ispublished: pub
subjects: HB
subjects: HD61
divisions: EIC
full_text_status: none
monograph_type: working_paper
keywords: Keywords: Principal-agent; Incentives; Risk aversion; Endogenous technolog   -  JEL Classification: D82
note: Working Papers Series in Economics, Mathematics and Statistics
abstract: 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.
date: 2013
number: 04
publisher: Università degli studi di Urbino. Facoltà di economia
pages: 10
institution: Università degli studi di Urbino Carlo Bo
issn: 1974-4110
official_url: http://www.econ.uniurb.it/RePEc/urb/wpaper/WP_13_04.pdf
citation:   Marini, Marco A. and Polidori, Paolo and Ticchi, Davide and Teobaldelli, Désirée  Optimal Incentives in a Principal-Agent Model with Endogenous Technology.  Working Paper  #04/2013    Università degli studi di Urbino. Facoltà di economia    ISSN 1974-4110.