Contracting theory with competitive interacting agents

Understand

In a framework close to the one developed by Holmstr\"om and Milgrom [44], we study the optimal contracting scheme between a Principal and several Agents.

• Each hired Agent is in charge of one project, and can make efforts towards managing his own project, as well as impact (positively or negatively) the projects of the other Agents.
• Considering economic Agents in competition with relative performance concerns, we derive the optimal contracts in both first best and moral hazard settings.
• The enhanced resolution methodology relies heavily on the connection between Nash equilibria and multidimensional quadratic BSDEs.