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Optimal contracts for experimentation
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Halac, Marina, Kartik, Navin and Liu, Qingmin (2016) Optimal contracts for experimentation. Review of Economic Studies, 83 (3). pp. 1040-1091. doi:10.1093/restud/rdw013 ISSN 0034-6527.
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Official URL: http://dx.doi.org/10.1093/restud/rdw013
Abstract
This paper studies a model of long-term contracting for experimentation. We consider a principal-agent relationship with adverse selection on the agent’s ability, dynamic moral hazard, and private learning about project quality. We find that each of these elements plays an essential role in structuring dynamic incentives, and it is only their interaction that generally precludes efficiency. Our model permits an explicit characterization of optimal contracts.
Item Type: | Journal Article | ||||||||||
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Subjects: | H Social Sciences > HD Industries. Land use. Labor > HD28 Management. Industrial Management T Technology > T Technology (General) |
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Divisions: | Faculty of Social Sciences > Economics | ||||||||||
Library of Congress Subject Headings (LCSH): | Project management , Research and development contracts -- Evaluation, Farm tenancy , Publishers and publishing, Moral hazard | ||||||||||
Journal or Publication Title: | Review of Economic Studies | ||||||||||
Publisher: | Oxford University Press | ||||||||||
ISSN: | 0034-6527 | ||||||||||
Official Date: | July 2016 | ||||||||||
Dates: |
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Volume: | 83 | ||||||||||
Number: | 3 | ||||||||||
Page Range: | pp. 1040-1091 | ||||||||||
DOI: | 10.1093/restud/rdw013 | ||||||||||
Status: | Peer Reviewed | ||||||||||
Publication Status: | Published | ||||||||||
Access rights to Published version: | Restricted or Subscription Access | ||||||||||
Date of first compliant deposit: | 15 September 2016 | ||||||||||
Date of first compliant Open Access: | 21 March 2018 | ||||||||||
Funder: | University of Chicago. Booth School of Business, Alfred P. Sloan Foundation |
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