Fixed wages and bonuses in agency contracts: the case of a continuous state space

In this paper, we extend the state-contingent production approach to principal–agent problems to the case where the state space is an atomless continuum. The approach is modelled on the treatment of optimal tax problems. The central observation is that, under reasonable conditions, the optimal contract may involve a fixed wage with a bonus for above-normal performance. This is analogous to the phenomenon of "bunching" at the bottom in the optimal tax literature.

A Correlation Analysis on LSA and HAL Semantic Space Models

In this paper, we compare a well-known semantic spacemodel, Latent Semantic Analysis (LSA) with another model, Hyperspace Analogue to Language (HAL) which is widely used in different area, especially in automatic query refinement. We conduct this comparative analysis to prove our hypothesis that with respect to ability of extracting the lexical information from a corpus of text, LSA is quite similar to HAL. We regard HAL and LSA as black boxes. Through a Pearsonrsquos correlation analysis to the outputs of these two black boxes, we conclude that LSA highly co-relates with HAL and thus there is a justification that LSA and HAL can potentially play a similar role in the area of facilitating automatic query refinement. This paper evaluates LSA in a new application area and contributes an effective way to compare different semantic space models.