Abstract
This paper claims that the first-order approach to agency problems can only hold if the likelihood ratio is bounded from below. None of the classic sets of sufficient conditions to validate it (Mirrlees-Rogerson (1979-1985) and Jewitt (1988)) guarantees such a condition.
| Original language | English |
|---|---|
| Pages (from-to) | 341-348 |
| Journal | Investigaciones Economicas |
| Volume | 31 |
| Issue number | 2 |
| Publication status | Published - 1 May 2007 |
Keywords
- Agency
- First-order approach
- Likelihood ratio