Review of Economic Studies Vol. 58 No. 5 1991
Computing Multi-Period, Information-Constrained Optima
Abstract
This paper presents a detailed theoretical derivation and justification for methods used to compute solutions to a multi-period (including infinite-period), continuum-agent, unobservedeffort economy. Actual solutions are displayed illustrating cross-sectional variability in consumption and labour effort in the population at a point in time and variability for a typical individual over time. The optimal tradeoff between insurance and incentives is explored and the issue of excess variability is addressed by consideration of the analogue full-information economy and various restricted-contracting regimes.
- DOI
- 10.2307/2297941
- Volume
- 58
- Issue
- 5
- Pages
- 853
- Sources
- bibtex:phds-export.bib openalex crossref