Learning by doing vs. learning from others in a principal-agent model

B-Tier
Journal: Journal of Economic Dynamics and Control
Year: 2010
Volume: 34
Issue: 10
Pages: 1967-1992

Score contribution per author:

1.005 = (α=2.01 / 2 authors) × 1.0x B-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

We introduce learning in a principal-agent model of output sharing under moral hazard. We use social evolutionary learning to represent social learning and reinforcement, experience-weighted attraction (EWA) and individual evolutionary learning (IEL) to represent individual learning. Learning in the principal-agent model is difficult due to: the stochastic environment; the discontinuity in payoffs at the optimal contract; and the incorrect evaluation of foregone payoffs for IEL and EWA. Social learning is much more successful in adapting to the optimal contract than standard individual learning algorithms. A modified IEL using realized payoffs evaluation performs better but still falls short of social learning.

Technical Details

RePEc Handle
repec:eee:dyncon:v:34:y:2010:i:10:p:1967-1992
Journal Field
Macro
Author Count
2
Added to Database
2026-01-24