Implications of Unequal Discounting in Dynamic Contracting
研究委托人和代理人贴现因子不同时的动态筛选问题，发现最优契约不再最大化延迟支付代理人信息租金，而是倾向于提前支付，并呈现无限记忆的周期结构。
This paper studies a canonical dynamic screening problem where the agent has Markovian private information and limited commitment and the principal and the agent have different discount factors. Unequal discounting captures unequal access to capital markets. In comparison to standard models of dynamic mechanism design, the principal no longer finds it optimal to maximally back-load the agent’s information rents: a new force of inter-temporal cost of incentive provision pushes toward front-loading agents’ payoffs. The optimal contract settles into a cycle with infinite memory. The introduction of unequal discounting renders the standard relaxed-problem approach invalid for certain parameters. A simple and approximately optimal contract is then provided.