Topic: Dynamic Contracting with Flexible Monitoring


Speaker: Yang Ming, University College London


Time: December 12, 2024, 14:30

Venue: EMS 206

Abstract:

We study a principal's joint design of optimal monitoring and compensation schemes to incentivize an agent. In an otherwise standard dynamic contracting framework, the principal can flexibly allocate her limited monitoring capacity between seeking evidence that confirms or contradicts the agent's effort, as the basis for reward or punishment. When the agent's continuation value is low, the principal seeks only confirmatory evidence. When it exceeds a threshold, the principal seeks mainly contradictory evidence. Importantly, the agent's effort is perpetuated if and only if he is sufficiently productive.

Guest Bio:

Yang Ming, PhD in Economics, Princeton University; MSc in Economics, Tsinghua University; BSc in Mathematics, Nanjing University. Associate Professor of Economics and Finance, UCL; Associate Professor, Assistant Professor in Finance, Duke University. I work on various topics in finance, economics, and accounting, which features strategic information acquisition/disclosure, (mis-)coordination, security design, and (dynamic) contracting. My work includes papers published in the Review of Economic Studies, the Review of Financial Studies, Journal of Economic Theory, Theoretical Economics, and the Journal of Accounting and Economics.