Why Us? >>

  • - Open Access
  • - Peer-reviewed
  • - Rapid publication
  • - Lifetime hosting
  • - Free indexing service
  • - Free promotion service
  • - More citations
  • - Search engine friendly

Free SCIRP Newsletters>>

Add your e-mail address to receive free newsletters from SCIRP.


Contact Us >>

WhatsApp  +86 18163351462(WhatsApp)
Paper Publishing WeChat
Book Publishing WeChat
(or Email:book@scirp.org)

Article citations


Hart, O. and Holmstrèom, B. (1987) The Theory of Contracts. In: Bewley, T.F., Ed., Advances in Economic Theory—5th World Congress, Cambridge University Press, Cambridge, 71-155.

has been cited by the following article:

  • TITLE: Portfolio Performance on Agency Mechanism with Capability of Manager

    AUTHORS: Haijun Yang, Wei Xia, Jian Fu

    KEYWORDS: The Ability of the Manager, Asymmetric Information, Moral Hazard, Optimal Contraction, Private Information

    JOURNAL NAME: Theoretical Economics Letters, Vol.8 No.1, January 4, 2018

    ABSTRACT: By given different capabilities of managers, a novel model of optimal contracting is proposed in agency problems, which adds a new variable denoted by the manager’s ability in delegated portfolio management. Then we compare our results with Dybvig and Farnsworth’s (2010) and find a new effect by appending this variable. The results show that in the first-best situation with log utility, the optimal contract is in accord with the result of Dybvig and Farnsworth’s (2010). In the second-best situation, the optimal contract is a proportional sharing rule plus a bonus. However, the bonus is associated with variables including private signals and the manager’s ability. In the third-best situation, the manager’s share is no longer a constant; and the manager’s fee is no longer a linear combination of the returns, which depends on the signal and the manager’s ability. So manager’s ability is an important variable for the market return. We can also find that these institutional features are more similar to practice than other existing agency models and consistent with the reality of the situation. The numerical results also verify the solutions.