Moral Hazard and Target Budgets

Ishiguro, Shingo; Yasuda, Yosuke

Moral Hazard and Target Budgets

Ishiguro, Shingo; Yasuda, Yosuke

Discussion Papers In Economics And Business, 2018, 18-03, 1-65

アクセス数:300件（2025-06-01 18:12 集計）

固定URL: https://hdl.handle.net/11094/67746

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タイトル	Moral Hazard and Target Budgets
著者	NRID 1000060288496 1000060288496 researchmap permalink ShingoIshiguro ShingoIshiguro Scopus Author ID 56236943400 56236943400 著者名 Ishiguro, Shingo ; イシグロ, シンゴ
著者	NRID 1000070463966 1000070463966 researchmap permalink 70463966 70463966 Scopus Author ID 37006230300 37006230300 著者名 Yasuda, Yosuke ; ヤスダ, ヨウスケ
キーワード等	Moral Hazard
	Multiple Agents
	Subjective Evaluation
	Target Budgets
抄録	In this paper we investigate a wide class of principal–agent problems with moral hazard and target budgets. The latter requires that the principal fixes a total budget for the wages paid to agents regardless of their outputs realized ex post. Target budgets are relevant not just because they are exogenous institutional constraints in some cases, but they can also endogenously arise in other cases, especially when agents’ performances are not verifiable and thus the principal needs subjective evaluations. Although target budgets impose an additional constraint, we show the irrelevance theorem that the principal is never worse off using target budgets when there are at least two risk-neutral agents. Even when all agents are risk averse, we also show that the similar irrelevance result asymptotically holds if the number of agents is sufficiently large. Furthermore, we characterize optimal contracts when the target budget becomes a tight constraint so that the irrelevance result cannot be applied.
出版者	Graduate School of Economics and Osaka School of International Public Policy (OSIPP), Osaka University
収録物名	Discussion Papers In Economics And Business
巻(号)	18-03
ページ	1-65
刊行年月	2018-02
言語	英語
ハンドルURL	https://hdl.handle.net/11094/67746
NCID	AA1160366X
関連情報 (references)	URI http://www2.econ.osaka-u.ac.jp/library/global/dp/1803.pdf
アクセス権	metadata only access
カテゴリ	ディスカッション／ワーキング・ペーパー DP/WP
カテゴリ	Discussion Papers In Economics And Business

資源タイプ	テクニカルレポート
ローカル資源タイプ	ディスカッション／ワーキング・ペーパー
DCMI資源タイプ	text
DCTERMS.bibliographicCitation	Discussion Papers In Economics And Business. 2018, 18-03, p. 1-65
DC.title	Moral Hazard and Target Budgets
DC.creator	Ishiguro, Shingo
	イシグロ, シンゴ
	Yasuda, Yosuke
	ヤスダ, ヨウスケ
DC.publisher	Graduate School of Economics and Osaka School of International Public Policy (OSIPP), Osaka University
DC.language' scheme='DCTERMS.RFC1766	英語
DC.type' scheme='DCTERMS.DCMIType	text
DCTERMS.issued' scheme='DCTERMS.W3CDTF	2018-02
DC.relation' scheme='DCTERMS.URI	http://www2.econ.osaka-u.ac.jp/library/global/dp/1803.pdf
DC.subject	Moral Hazard
	Multiple Agents
	Subjective Evaluation
	Target Budgets
DCTERMS.abstract	In this paper we investigate a wide class of principal–agent problems with moral hazard and target budgets. The latter requires that the principal fixes a total budget for the wages paid to agents regardless of their outputs realized ex post. Target budgets are relevant not just because they are exogenous institutional constraints in some cases, but they can also endogenously arise in other cases, especially when agents’ performances are not verifiable and thus the principal needs subjective evaluations. Although target budgets impose an additional constraint, we show the irrelevance theorem that the principal is never worse off using target budgets when there are at least two risk-neutral agents. Even when all agents are risk averse, we also show that the similar irrelevance result asymptotically holds if the number of agents is sufficiently large. Furthermore, we characterize optimal contracts when the target budget becomes a tight constraint so that the irrelevance result cannot be applied.
DC.format	67746
citation_title	Moral Hazard and Target Budgets
citation_author	Ishiguro, Shingo
citation_author	Yasuda, Yosuke
citation_publisher	Graduate School of Economics and Osaka School of International Public Policy (OSIPP), Osaka University
citation_language	英語
citation_date	2018-02
citation_journal_title	Discussion Papers In Economics And Business
citation_volume	18-03
citation_firstpage	1
citation_lastpage	65
citation_public_url	https://hdl.handle.net/11094/67746
citation_abstract_html_url	http://www2.econ.osaka-u.ac.jp/library/global/dp/1803.pdf

Moral Hazard and Target Budgets

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