This paper studies the relation between discrete-time and continuoustime principal-agent models. We derive the continuous-time model as a limit of discretetime models with ever shorter periods and show that optimal incentive schemes in the discrete-time models approximate the optimal incentive...

In this paper, we study the principal-agent problem. It is well known that in continuous-time, it is possible to prove the existence of an equilibrium <InlineEquation ID="IEq1"> <EquationSource Format="TEX">$$ (u^{*},S^{*})$$</EquationSource> </InlineEquation> in a considerably general setting, and however little is known about the strategies themselves. Our goal is to present a...</equationsource></inlineequation>

In this paper, I study the dynamic delegation problem in a principal–agent model wherein an agent privately observes a persistently evolving state, and the principal commits to actions based on the agent's reported state. There are no transfers. While the agent has state-independent...