Principal Agent Models Part 1: Moral Hazard with Observability

In part one, we look at a model with the potential for Moral Hazard (Hidden Actions) that might hurt the Principal), but first assume that you can observe the effort of the agent. In the next video, we will assume that the agent's actions are hidden, but output is not-- solving the true moral hazard problem for the optimal contract.
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[@mohammedmahinuralam2796]

Clear and simple explanations. Thanks a lot for sharing the video.

[@meem524]

Hi. Can you share what the profit funtion will be in this case? For the different values of effort

[@amiteshsrivastava615]

Sir can you please explain this problem through optimal control theory or can you provide the solution of this problem through optimal control theory.

[@florencezimba9263]

Thank you sire

[@mrbinhesam]

Great and amazing video, I finally could understand what is going on.

[@haggaisimon7748]

It's incentive compatibility constraint instead of ind. rationality. IR constraint is the same as participation constraint. Also I think Fudenberg Tirole repeated the process in their book Game theory, am I right?

[@ChopperEnco10]

This is quite fantastic. Thank you good sir!

[@zbellucf]

Thank you, thank you, thank you!

[@dainerystargaryen]

Thank you so much for such a clear explanation!​

[@lauga097]

Great video! Thank you so much!

[@홍동현-v9l]

Thank you for your clear teaching. But your handout is no longer available. How could I get it?

[@BurkeyAcademy]

Thanks for asking- Google screwed up hundreds of my links- I updated it in the video description.

[@timothyg9969]

Thank u so much!