Derive goal functions of the principal and agent, Mathematics

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Derive goal functions of the principal and agent

Response to the following problem:

An organizational system consists of a single princi- pal and a single agent. The cost function of the agent and the income function of the principal are given by

c(y) = y 2/(2r), y ≥ 0 and H(y) = α y , respectively.

Derive goal functions of the principal and agent.

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Mathematics: Derive goal functions of the principal and agent

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