Washington University in Saint Louis
August 1, 2014
In dynamic agency models of imperfect public monitoring over finite T instances, one can implement near-efficient outcomes when T is large if there is a sequence of performance test statistics that has concentrated measures and is sufficiently informative of the agent's true profit contribution asymptotically. Conversely, in dynamic agency models with frequent actions, asymptotic near-efficiency obtains only if this condition is satisfied. To show these results, I construct test contracts which attain robust performances for each T under general signal processes that can depend arbitrarily on past actions and exhibit moderate serial correlation even if details of the signal process are not exactly known to the contract designer.
Number of Pages in PDF File: 38
Keywords: dynamic agency problem
JEL Classification: D86working papers series
Date posted: July 6, 2013 ; Last revised: August 31, 2014
© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.
This page was processed by apollo8 in 0.125 seconds