Optimal Long-term Contracts with Limited Commitment and Unobservable Disability
2019/11/21
研討會日期 : 2019-11-21
時間 : 14:30
主講人 : Professor Hsuan-Chih Lin (林軒馳)
主持人 : Professor Ritesh Jain
地點 : Conference Room B110
演講者簡介 : Professor Lin received his Ph.D. in Economics at University of Wisconsin-Madison in 2015. He is currently an Assistant Research Fellows at the Institute of Economics, Academia Sinica. His research fields are Macroeconomics and Monetary Economics, International Trade and Development.
演講摘要 : We study a continuous-time model of an optimal long-term labor contract with a randomly arriving disability shock under two frictions: the agent cannot commit to a long-term contract and can falsely claim disability. We provide the explicit solution and analyze the optimal contract by solving optimal stopping problems via a duality approach. We show that the optimal contract can be implemented under a three-account trading system, which has different features from those generated under only one of two frictions studied in the previous literature. By using the three account system, we investigate how the arrival intensity of the disability shock and the level of disability severity have an impact on the optimal contract. Finally we also perform a quantitative analysis on the firm’s cost from providing inefficient contracts caused by the current long-term disability insurance practice.
