| dc.creator |
Protopopescu, Dan |
|
| dc.date |
2008-05-19T11:55:34Z |
|
| dc.date |
2008-05-19T11:55:34Z |
|
| dc.date |
2008-04-01 |
|
| dc.date.accessioned |
2017-01-31T01:22:08Z |
|
| dc.date.available |
2017-01-31T01:22:08Z |
|
| dc.identifier |
http://hdl.handle.net/10261/4345 |
|
| dc.identifier.uri |
http://dspace.mediu.edu.my:8181/xmlui/handle/10261/4345 |
|
| dc.description |
Submitted for publication to the Journal of Economic Theory. |
|
| dc.description |
The objective of this paper is to re-evaluate the attitude to effort of a risk-averse decision-maker in an evolving environment. In the classic analysis, the space of efforts is generally discretized. More realistic, this new approach emploies a continuum of effort levels. The presence of multiple possible efforts and performance levels provides a better basis for explaining real economic phenomena. The traditional approach (see, Laffont, J. J. & Tirole, J., 1993, Salanie, B., 1997, Laffont, J.J. and Martimort, D, 2002, among others) does not take into account the potential effect of the system dynamics on the agent's behavior to effort over time. In the context of a Principal-agent relationship, not only the incentives of the Principal can determine the private agent to allocate a good effort, but also the evolution of the dynamic system. The incentives can be ineffective when the environment does not incite the agent to invest a good effort. This explain why, some efficient strategic incentive-compatible constraints that cover the entire period of contract do not generally exist. The present approach improves our understanding as regards the agent's psychology to effort as decision-maker. It provides new perspectives of research for theorists and empirical analysts. |
|
| dc.description |
This article is based on research undertaken with support from European Community's PHARE ACE Programme 1998 under grant P98-2103-S. |
|
| dc.description |
Peer reviewed |
|
| dc.format |
2850623 bytes |
|
| dc.format |
application/pdf |
|
| dc.language |
eng |
|
| dc.relation |
UFAE and IAE Working Papers |
|
| dc.relation |
739.08 |
|
| dc.rights |
openAccess |
|
| dc.subject |
Optimal trajectory |
|
| dc.subject |
Closed-loop strategy |
|
| dc.subject |
Controlled stochastic environment |
|
| dc.subject |
Rational decision-maker |
|
| dc.subject |
Endogenous dynamic active learning |
|
| dc.subject |
Adaptive effort management |
|
| dc.subject |
Optimal effort threshold |
|
| dc.subject |
Effort aversion |
|
| dc.subject |
Excessive behavior |
|
| dc.subject |
Learning of preferences |
|
| dc.title |
Improving the Effort Concept: A Revision of the Traditional Approach in the Context of Controlled Dynamic Stochastic Environments |
|
| dc.type |
Documento de trabajo |
|