{"status":"ok","message-type":"work","message-version":"1.0.0","message":{"indexed":{"date-parts":[[2025,8,2]],"date-time":"2025-08-02T17:57:50Z","timestamp":1754157470747,"version":"3.41.2"},"reference-count":18,"publisher":"Emerald","issue":"3\/4","license":[{"start":{"date-parts":[[2009,4,10]],"date-time":"2009-04-10T00:00:00Z","timestamp":1239321600000},"content-version":"tdm","delay-in-days":0,"URL":"https:\/\/www.emerald.com\/insight\/site-policies"}],"content-domain":{"domain":[],"crossmark-restriction":false},"short-container-title":[],"published-print":{"date-parts":[[2009,4,10]]},"abstract":"<jats:sec><jats:title content-type=\"abstract-heading\">Purpose<\/jats:title><jats:p>The purpose of this paper is to study the incentive mechanism design problem of manager under the assumption of bounded rationality in the theoretical framework of principal\u2010agent relationship and provide some insights into the relationship between the economic agent's rationality and incentive mechanism.<\/jats:p><\/jats:sec><jats:sec><jats:title content-type=\"abstract-heading\">Design\/methodology\/approach<\/jats:title><jats:p>The framework of principal\u2010agent relationship is based on the full rationality of the agents. However, the agents cannot make optimal decisions in the uncertain and imprecise environment. To capture the essence of incentive scheme, bounded rationality is introduced in the model and the gradient dynamics is applied in modelling bounded rational learning behavior. The corresponding single\u2010task principal\u2010agent problem is solved to obtain the second\u2010best contracts and the effort levels. Furthermore, the results are generalized for the multi\u2010task principal\u2010agent problem.<\/jats:p><\/jats:sec><jats:sec><jats:title content-type=\"abstract-heading\">Findings<\/jats:title><jats:p>The second\u2010best contract under the assumption of bounded rationality converges to the optimal contract under the assumption of full rationality over time.<\/jats:p><\/jats:sec><jats:sec><jats:title content-type=\"abstract-heading\">Research limitations\/implications<\/jats:title><jats:p>Accessibility of data for empirical research is the main limitation which model will be applied.<\/jats:p><\/jats:sec><jats:sec><jats:title content-type=\"abstract-heading\">Practical implications<\/jats:title><jats:p>A useful reference for managerial decisions.<\/jats:p><\/jats:sec><jats:sec><jats:title content-type=\"abstract-heading\">Originality\/value<\/jats:title><jats:p>The new approach of bounded rationality modeling and simulation. This paper is aimed at the owners, enterprisers, managers, and workers.<\/jats:p><\/jats:sec>","DOI":"10.1108\/03684920910944191","type":"journal-article","created":{"date-parts":[[2009,5,30]],"date-time":"2009-05-30T07:05:38Z","timestamp":1243667138000},"page":"481-488","source":"Crossref","is-referenced-by-count":2,"title":["Incentive mechanism design problem based on gradient dynamics"],"prefix":"10.1108","volume":"38","author":[{"given":"Shi","family":"Kuiran","sequence":"first","affiliation":[]},{"given":"Xiao","family":"Tiaojun","sequence":"additional","affiliation":[]},{"given":"Sheng","family":"Zhaohan","sequence":"additional","affiliation":[]}],"member":"140","reference":[{"key":"key2022032019541584700_b1","unstructured":"Conlisk, J. (1996), \u201cWhy bounded rationality?\u201d, Journal of Economic Literature, Vol. 34, pp. 669\u2010700."},{"key":"key2022032019541584700_b2","doi-asserted-by":"crossref","unstructured":"Fudenburg, D. and Harris, C. 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