No cure, be paid: Super-contingent fee contracts

L. Schoonbeek; P. Kooreman

doi:10.1080/13504850500142544

No cure, be paid: Super-contingent fee contracts

L. Schoonbeek, P. Kooreman

Economics, Econometrics and Finance

Research output: Contribution to journal › Article › Academic › peer-review

1 Citation (Scopus)

Abstract

A general principal-agent problem with two possible outputs, high or low is considered. The agent's utility function is additively separable in wealth and effort. It is shown that under the optimal contract, the agent should pay a penalty fee to the principal if the low output occurs.

Original language	English
Pages (from-to)	549-551
Number of pages	3
Journal	Applied Economics Letters
Volume	12
Issue number	9
DOIs	https://doi.org/10.1080/13504850500142544
Publication status	Published - 15-Jul-2005

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title = "No cure, be paid: Super-contingent fee contracts",

abstract = "A general principal-agent problem with two possible outputs, high or low is considered. The agent's utility function is additively separable in wealth and effort. It is shown that under the optimal contract, the agent should pay a penalty fee to the principal if the low output occurs.",

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No cure, be paid: Super-contingent fee contracts

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