Monotone contracts

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  • dc.contributor.author Bird, Daniel
  • dc.contributor.author Frug, Alexander
  • dc.date.accessioned 2024-03-04T14:00:46Z
  • dc.date.available 2024-03-04T14:00:46Z
  • dc.date.issued 2022
  • dc.description.abstract We develop a framework for deriving dynamic monotonicity results in long-term stochastic contracting problems with symmetric information. Specifically, we construct a notion of concave separable activity that encompasses many prevalent contractual components (e.g., wage, effort, level of production, etc.). We then provide a tight condition under which such activities manifest a form of seniority in every contracting problem in which they are present: any change that occurs in the level of the activity over time favors the agent. Our work unifies and significantly generalizes many existing results and can also be used to establish monotonicity results in other settings of interest.
  • dc.description.sponsorship Bird acknowledges financial support from the Sapir Center for Economic Development. Frug acknowledges the financial support of the Spanish Ministry of Science and Innovation through Grants AEI/FEDER, UE - PGC2018-098949-B-I00, SEV-2015-0563, and CEX2019-000915-S.
  • dc.format.mimetype application/pdf
  • dc.identifier.citation Bird D, Frug A. Monotone contracts. Theoretical Economics. 2022;17(3):1041-73. DOI: 10.3982/TE4842
  • dc.identifier.doi http://dx.doi.org/10.3982/TE4842
  • dc.identifier.issn 1555-7561
  • dc.identifier.uri http://hdl.handle.net/10230/59315
  • dc.language.iso eng
  • dc.publisher Wiley
  • dc.relation.ispartof Theoretical Economics. 2022;17(3):1041-73.
  • dc.relation.projectID info:eu-repo/grantAgreement/ES/2PE/PGC2018-098949-B-I00
  • dc.relation.projectID info:eu-repo/grantAgreement/ES/2PE/CEX2019-000915-S
  • dc.relation.projectID info:eu-repo/grantAgreement/ES/1PE/SEV-2015-0563
  • dc.rights © 2022 The Authors. Licensed under the Creative Commons Attribution-NonCommercial License 4.0. Available at https://econtheory.org. https://doi.org/10.3982/TE4842
  • dc.rights.accessRights info:eu-repo/semantics/openAccess
  • dc.rights.uri https://creativecommons.org/licenses/by-nc/4.0/
  • dc.subject.keyword Dynamic contracting
  • dc.subject.keyword activities
  • dc.subject.keyword seniority
  • dc.title Monotone contracts
  • dc.type info:eu-repo/semantics/article
  • dc.type.version info:eu-repo/semantics/publishedVersion

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