Optimal project termination with an informed agent
Abstract/Contents
- Abstract
- This dissertation analyzes optimal incentive contracting for environments in which the state of a temporary project is monitored imperfectly by a firm. The firm must decide when to halt the project, assisted by an agent with private information about the project's state, limited liability, and incentives for delayed project termination. I develop techniques for solving the resulting novel mechanism design problem, which exhibits the feature that the agent extracts information rents despite the absence of time-zero asymmetric information. The firm's problem is to craft dynamic incentives to limit these rents while trading off against reduced efficiency. The optimal contract involves occasional inefficient early project termination, but no late termination; a golden parachute which declines with proximity to termination; and hard and soft deadlines exhibiting asymmetric sensitivity to news close to and far from termination.
Description
| Type of resource | text |
|---|---|
| Form | electronic; electronic resource; remote |
| Extent | 1 online resource. |
| Publication date | 2016 |
| Issuance | monographic |
| Language | English |
Creators/Contributors
| Associated with | Madsen, Erik |
|---|---|
| Associated with | Stanford University, Graduate School of Business |
| Primary advisor | Skrzypacz, Andrzej, 1973- |
| Thesis advisor | Skrzypacz, Andrzej, 1973- |
| Thesis advisor | Di Tella, Sebastian T |
| Thesis advisor | Wilson, Robert, 1937- |
| Advisor | Di Tella, Sebastian T |
| Advisor | Wilson, Robert, 1937- |
Subjects
| Genre | Theses |
|---|
Bibliographic information
| Statement of responsibility | Erik Madsen. |
|---|---|
| Note | Submitted to the Graduate School of Business. |
| Thesis | Thesis (Ph.D.)--Stanford University, 2016. |
| Location | https://purl.stanford.edu/rc651nm2135 |
Access conditions
- Copyright
- © 2016 by Erik Madsen
- License
- This work is licensed under a Creative Commons Attribution Non Commercial 3.0 Unported license (CC BY-NC).
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