In this talk I will describe the classical contract theory problems in which a principal
hires an agent to manage a risky project: risk-sharing, moral hazard and adverse selection. We will consider two main formulations: the contract payoff paid to the agent at the final time, and continuous payments on an infinite horizon. The agent’s problem will be solved using the weak formulation of stochastic control, while the principal’s problem will be solved using the HJB approach. I will mention applications in corporate finance and delegated portfolio management.
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