Zhaohui Chen
Institution
University of Virginia
PhD Year
2004
zc8j@comm.virginia.edu
FTG Membership
Member
Website
https://www.commerce.virginia.edu/faculty/zc8j
Featured Work
Oct 3, 2025
Debt and the Optimal Incentives Over Time
Using a backward stochastic differential equation (BSDE) framework, we examine the principal-agent problem in a finite-horizon continuous-time setting where the agent’s effort is a continuous choice, and the principal can impose non-pecuniary punishments. We show that the agent’s optimal incentive scheme, dependent on time and the firm’s state, can be implemented by the principal holding a standard or callable debt, and the agent owns the...
Aug 1, 2025
Debt and the Optimal Incentives Over Time
Using a backward stochastic differential equation (BSDE) framework, we examine the principal-agent problem in a finite-horizon continuous-time setting where the agent’s effort is a continuous choice, and the principal can impose non-pecuniary punishments. We show that the agent’s optimal incentive scheme, dependent on time and the firm’s state, can be implemented by the principal holding a standard or callable debt, and the agent owns the...
