IFin Seminar, Stéphane Villeneuve - Toulouse School of Economics "Shifting Demand, Hedging and Incentive Pay"

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Data:

Relatore:   Stéphane Villeneuve - Toulouse School of Economics

Tema:       "Shifting Demand, Hedging and Incentive Pay"

Data:        6 maggio 2021

Ore:          12:25-13:35

Aula:         Virtuale

Campus di Lugano

 

Abstract
We investigate analytically how demand uncertainty and futures markets affect compen- sation in a principal-agent relationship. We consider the contracting problem of a firm that hires an agent to increase production of some good by exerting effort. It is assumed that the firm sells all its production at a pre-specified date. The firm maximizes its revenues by offering a contract and hedging on a futures markets. We characterize explicitly the optimal contract and comment on the effects of elastic demand on incentive costs.

 

 

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