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Article: A graphical approach to the standard principal-agent model

TitleA graphical approach to the standard principal-agent model
Authors
KeywordsAgency theory
Contracts
Managerial incentives
Issue Date2002
PublisherHeldref Publications. The Journal's web site is located at http://www.heldref.org/jecone.php
Citation
Journal Of Economic Education, 2002, v. 33 n. 3, p. 265-276 How to Cite?
AbstractAn obstacle to the teaching of principal-agent theory is the technical complexity and intractability of the general model. Even in academic studies strong assumptions are often imposed so as to derive an analytical solution. The author describes a graphical approach to the standard principal-agent model. Characterizing equilibrium in the contract space defined by the incentive parameter and insurance component of pay under a linear contract, this approach provides a simple and intuitive method for analyzing the principal-agent problem, which can be easily understood by students of economics with basic knowledge of algebra and differentiation. The approach has shown to be convenient and rich for comparative statics analyses.
Persistent Identifierhttp://hdl.handle.net/10722/53506
ISSN
2015 Impact Factor: 0.507
2015 SCImago Journal Rankings: 1.449
References

 

DC FieldValueLanguage
dc.contributor.authorZhou, Xen_HK
dc.date.accessioned2009-04-03T07:21:47Z-
dc.date.available2009-04-03T07:21:47Z-
dc.date.issued2002en_HK
dc.identifier.citationJournal Of Economic Education, 2002, v. 33 n. 3, p. 265-276en_HK
dc.identifier.issn0022-0485en_HK
dc.identifier.urihttp://hdl.handle.net/10722/53506-
dc.description.abstractAn obstacle to the teaching of principal-agent theory is the technical complexity and intractability of the general model. Even in academic studies strong assumptions are often imposed so as to derive an analytical solution. The author describes a graphical approach to the standard principal-agent model. Characterizing equilibrium in the contract space defined by the incentive parameter and insurance component of pay under a linear contract, this approach provides a simple and intuitive method for analyzing the principal-agent problem, which can be easily understood by students of economics with basic knowledge of algebra and differentiation. The approach has shown to be convenient and rich for comparative statics analyses.en_HK
dc.languageengen_HK
dc.publisherHeldref Publications. The Journal's web site is located at http://www.heldref.org/jecone.phpen_HK
dc.relation.ispartofJournal of Economic Educationen_HK
dc.rightsCreative Commons: Attribution 3.0 Hong Kong License-
dc.rightsThe Journal of Economic Education. Copyright © Heldref Publications.en_HK
dc.subjectAgency theoryen_HK
dc.subjectContractsen_HK
dc.subjectManagerial incentivesen_HK
dc.titleA graphical approach to the standard principal-agent modelen_HK
dc.typeArticleen_HK
dc.identifier.openurlhttp://library.hku.hk:4550/resserv?sid=HKU:IR&issn=0022-0485&volume=33&issue=3&spage=265&epage=276&date=2002&atitle=A+graphical+approach+to+the+standard+principal-agent+modelen_HK
dc.identifier.emailZhou, X: xianzhou@hkucc.hku.hken_HK
dc.identifier.authorityZhou, X=rp01129en_HK
dc.description.naturepublished_or_final_versionen_HK
dc.identifier.scopuseid_2-s2.0-26044466031en_HK
dc.identifier.hkuros82596-
dc.relation.referenceshttp://www.scopus.com/mlt/select.url?eid=2-s2.0-26044466031&selection=ref&src=s&origin=recordpageen_HK
dc.identifier.volume33en_HK
dc.identifier.issue3en_HK
dc.identifier.spage265en_HK
dc.identifier.epage276en_HK
dc.publisher.placeUnited Statesen_HK
dc.identifier.scopusauthoridZhou, X=8217375200en_HK

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