Grochulski, Borys; Zhang, Yuzhe - In: Theoretical economics : TE ; an open access journal in … 18 (2023) 1, pp. 381-419
In this paper, we study the conditions under which termination is a useful incentive device in the canonical dynamic … dominates termination if the principal's outside option is low and the agent's outside option is moderate. In suspension, the … suspension. Because the optimal use of suspension versus termination after poor performance can be highly sensitive to the …