Multiple-task and multiple-agent models: Incentive contracts and an application to point pollution control

Research output: Contribution to journalResearch articleContributedpeer-review

Abstract

Two types of linear-quadratic principal-agent models will be considered: one in which a single agent has to perform several tasks and one in which several agents have to perform a certain task. For both models, we derive optimal contractual principal-agent relations. It turns out that under certain conditions (concerning risk-aversion and the correlation of the agents' outcome) the multiple-agent problem reduces to a multiple-task one-agent problem. Our results will be discussed within the framework of (multiple-) point pollution to which, in addition, also the results of the standard principal-agent model will be applied.

Details

Original languageEnglish
Pages (from-to)57-78
Number of pages22
JournalAnnals of Operations Research
Volume54
Issue number1
Publication statusPublished - Dec 1994
Peer-reviewedYes

Keywords

Keywords

  • environmental policy, firm organization, linear incentive schemes, multi-agents, Principal-agent, Subject classification: JEL D82, L22, Q28

Library keywords