Dynamic Agency with Renegotiation and Managerial Tenure
证明动态LEN模型中再谈判无约束原则成立，并分析序列相关业绩信息下重复再谈判对激励和管理者任期的影响，刻画最优任期与更替政策。
This paper proves the renegotiation-proofness principle for a dynamic LEN (linear contracts, exponential utility, normal distributions) model and examines the impact of repeated renegotiation on incentives and managerial tenure when performance information is serially correlated. In addition to providing a general solution to a multiperiod agency problem with serially correlated performance measures, this paper characterizes optimal managerial tenure/turnover policies as a function of the time-series properties of performance measures. With negatively correlated performance measures, the principal prefers longer managerial tenure, and no turnover is optimal. With positively correlated performance measures, absent a switching cost, turnover every period is optimal. In the presence of a fixed switching cost, interior optimal turnover policies exist if the performance measures are positively correlated. Switching costs are necessary, but not sufficient for interior optimal tenure. The optimal turnover policies present an alternative to theories of performance-driven managerial turnover and are consistent with evidence that a majority of managerial turnovers are (age-related) normal retirements.