Moral Hazard and Observability

E680268
academic paper economics paper

"Moral Hazard and Observability" is a seminal economic paper by Bengt Holmström that develops the theory of optimal incentive contracts under conditions of hidden actions and imperfect information.

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Statements (41)

Predicate Object
instanceOf academic paper ⓘ
economics paper ⓘ
analyzes trade-off between incentives and insurance ⓘ
assumes risk-averse agent ⓘ
risk-neutral principal ⓘ
unobservable effort ⓘ
author Bengt Holmström NERFINISHED ⓘ
citationStatus highly cited ⓘ
contributedTo Nobel Prize recognition of Bengt Holmström ⓘ
countryOfPublication United States of America ⓘ
surface form: United States
develops formal model of hidden action ⓘ
optimal contract under moral hazard ⓘ
field contract theory ⓘ
information economics NERFINISHED ⓘ
microeconomics ⓘ
hasKeyConcept incentive–insurance trade-off ⓘ
informativeness principle ⓘ
outcome-contingent pay ⓘ
second-best optimality under moral hazard ⓘ
influenced corporate governance research ⓘ
executive compensation theory ⓘ
labor contract design ⓘ
modern contract theory ⓘ
principal–agent modeling in finance ⓘ
theory of optimal incentive schemes ⓘ
language English ⓘ
publicationYear 1979 ⓘ
publishedIn The Bell Journal of Economics NERFINISHED ⓘ
publisher The RAND Corporation NERFINISHED ⓘ
shows agent’s compensation should depend on observable outcomes ⓘ
optimal contract is second-best under hidden action ⓘ
stronger incentives reduce risk sharing ⓘ
topic hidden action ⓘ
imperfect information ⓘ
incentive contracts ⓘ
moral hazard ⓘ
performance-based compensation ⓘ
principal–agent problem ⓘ
risk sharing ⓘ
usesMethod constrained optimization ⓘ
principal–agent model ⓘ

Referenced by (1)

Full triples — surface form annotated when it differs from this entity's canonical label.

Bengt Holmström (studies, later MIT) → notableWork → Moral Hazard and Observability ⓘ
subject surface form: Bengt Holmström