Optimal Dynamic Contracting : the First-Order Approach and Beyond

  • Rohit Lamba
  • Published 2014


We study a dynamic principal-agent model in which the agent’s types are serially correlated. In these models, the standard approach consists of first solving a relaxed version in which only local incentive compatibility constraints are considered, and then in proving that the local constraints are sufficient for implementability. We explore the conditions… (More)

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