Golden parachutes under the threat of accidents
研究了一个连续时间契约模型，其中代理人负责提高项目增长率和降低事故风险，委托人提供持续支付和可能的终止补偿，探讨了事故引入对金色降落伞特征的影响。
Abstract This paper addresses a continuous‐time contracting model that extends Sannikov's problem. In our model, a principal hires a risk‐averse agent to carry out a project. Specifically, the agent can perform two different tasks, namely to increase the instantaneous growth rate of the project's value, and to reduce the likelihood of accidents occurring. In order to compensate for these costly actions, the principal offers a continuous stream of payments throughout the entire duration of a contract, which concludes at a random time, potentially resulting in a lump‐sum payment. We examine the consequences stemming from the introduction of accidents, modeled by a compound Poisson process that negatively impact the project's value. Furthermore, we investigate whether certain economic scenarii are still characterized by a golden parachute as in Sannikov's model. A golden parachute refers to a situation where the agent stops working and subsequently receives a compensation, which may be either a lump‐sum payment leading to termination of the contract or a continuous stream of payments, thereby corresponding to a pension.