Agency Contracts under Maximum-Entropy.

This article proposes the application of the maximum-entropy principle (MEP) to agency contracting (where a hires an to make decisions on their behalf) in situations where the principal and agent only have partial knowledge on the probability distribution of the output conditioned on the agent's actions. The paper characterizes the second-best agency contract from a maximum entropy distribution (MED) obtained from applying the MEP to the agency situation consistently with the information available. We show that, with the minimum shared information about the output distribution for the agency relationship to take place, the second-best compensation contract is (a monotone transformation of) an increasing affine function of output.

Is there life beyond the Spanish government's aid to furloughed employees by COVID-19?

This paper examines the perceptions of firms in April 2020, one month after the Spanish Government declared the state of alarm, about how the COVID-19 pandemic will affect their business activity in the following months, and what employment decisions they expect to make in response. The data for the study was collected by the Government of the region of Aragon (Spain) through a survey of a non-randomly selected sample of firms located in the region. In addition to prospects and intended actions, firms were asked whether or not they had applied for ERTE aid (the Spanish job retention scheme to contain the pandemic crisis).