Abstract

This paper utilizes the principal/agent models to study the design and selection of pharmaceutical care contracts based on the effort level of both parties. We design the corresponding optimal contract in three situations. The performance of pharmaceutical care is modeled with the principal's efforts and the agent's effort. Under this performance function, we obtain the expression of the total surplus under each contract. The conclusion is that the performance of pharmaceutical care projects is more sensitive to the agent's effort, so the fixed-fee contract with a payment contingent on performance is optimal.

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