First-order approach
id:
first-order-approach-197-17793474
title:
First-order approach
text:
In microeconomics and contract theory, the first-order approach is a simplifying assumption used to solve models with a principal-agent problem. It suggests that, instead of following the usual assumption that the agent will take an action that is utility-maximizing, the modeller use a weaker constraint, and looks only for actions which satisfy the first-order conditions of the agent's problem. This makes the model mathematically more tractable, but it may not always give a valid solution to the
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wiki
category slug:
encyclopedia
description:
original url:
https://en.wikipedia.org/wiki/First-order_approach
date created:
date modified:
2024-04-03T16:27:19Z
main entity:
{"identifier":"Q124625366","url":"https://www.wikidata.org/entity/Q124625366"}
image:
fields total:
13
integrity:
13