Robustness and linear contracts

Speaker:
Organiser:
Arghya Chakraborty
Date:
Friday, 1 Dec 2023, 14:30 to 15:30
Venue:
A-238
Abstract

We consider a game theoretic model with two players- the principal and the agent. The principal knows some actions available to the agent, but other, unknown actions may also exist. The principal evaluates contracts according to their worst-case performance, with respect to the actions that may or may not be available to the agent. Under very general circumstances, the unique optimal contract is linear.

Robustness and Linear Contracts