The authors consider a principal-agent contracting problem under incomplete information where some of the agent's actions are imperfectly observable. Contracts take the form of reward schedules based on the noisy observation of the agent's action. They first review situations where the principal...

This paper examines, within the framework of a multidimensional one-step forward-looking model, a special category of rational expectations equilibria. Their support is infinite with two accumulation points (steady states); the stochastic motion of the system is of random-walk type. A general...