Overconfidence and moral hazard without commitment
研究了在有限承诺的道德风险环境中，过度自信如何使委托人通过剥削性合同激励代理人付出更高努力，并分析了混合策略均衡下过度自信对风险与努力概率的影响。
We examine the implications of overconfidence in a moral hazard setting with limited commitment. Limited commitment is costly because the principal will always renegotiate to the optimal risk-sharing contract after the agent chooses his effort level. This means that no effort level above the minimum can be implemented in pure strategies when the principal and the agent have homogeneous beliefs. With overconfidence, the optimal risk-sharing contract provides payments that increase in outcome to exploit the agent’s overconfidence. The agent anticipates the exploitative contract and willingly chooses higher than minimum effort in equilibrium. Providing the agent rent can increase the slope of the optimal risk-sharing contract and, therefore, expand the set of implementable effort levels. In a mixed-strategy equilibrium, overconfidence simultaneously decreases the risk in the second-best contract and increases the risk in the optimal risk-sharing contract, increasing the probability of high effort in equilibrium.