Optimal exit under moral hazard

OMI Seminar Series

We revisit the optimal exit problem by adding a moral hazard problem where a firm owner contracts out with an agent to run a project. We analyse the optimal contracting problem between the owner and the agent in a Brownian framework, when the latter modifies the project cash-flows with an hidden action. The analysis leads to the resolution of a constrained optimal stopping problem that we solve explicitly.


Stephane Villeneuve (Toulouse School of Economics)

Thursday, June 18, 2015 - 16:00
to 17:00