{
  "abstract": "In this paper, we revisit the construction of optimal incentives in continuous-time principal-agent problems with drift and volatility control. Originally, a general approach relying on dynamic programming and second-order backward stochastic differential equations (2BSDEs) was developed by Cvitanić, Possamaï, and Touzi (2018) [8] to determine the optimal form of contracts in this setting. More recently, Chiusolo and Hubert (2026) [5] proposed a BSDE-based approach by introducing an alternative `contractible-volatility' problem for the principal. In addition to the proposed new method, this work highlights that the optimality result of [8] actually hinges on an assumption, stated below as Assumption 2.3, which may not hold in general. Motivated by this, we introduce in this paper a more general class of contracts, parametrised by a function $ψ$ subject to conditions that make the contract revealing for the agent and without loss of generality for the principal. We further provide two natural specifications of $ψ$: one, inspired by the BSDE approach, yielding a forcing-type contract; the other, motivated by the 2BSDE approach, correcting the duality gap when Assumption 2.3 is not satisfied.",
  "abstract_shown": true,
  "affiliations": [],
  "article_type": null,
  "arxiv": null,
  "author_total": 4,
  "authors": [
    {
      "name": "Alessandro Chiusolo"
    },
    {
      "name": "Emma Hubert"
    },
    {
      "name": "Dylan Possamaï"
    },
    {
      "name": "Nizar Touzi"
    }
  ],
  "bibtex": "https://research.draconitic.com/paper/ac1tcbjhb3ytj.bib",
  "cited_by": 0,
  "doi": "10.48550/arxiv.2607.27039",
  "fulltext_url": null,
  "id": "ac1tcbjhb3ytj",
  "issns": [],
  "landing_url": "https://hal.science/hal-05854172v1",
  "language": "en",
  "licence": "CC-BY-4.0",
  "licence_label": "CC BY 4.0",
  "licence_source": "article",
  "licence_url": "https://creativecommons.org/licenses/by/4.0/",
  "metadata_licence": null,
  "native_subjects": [
    [
      "hal",
      "0.math"
    ],
    [
      "hal",
      "1.math.math-oc"
    ],
    [
      "openalex",
      "2003|Stochastic processes and financial applications"
    ]
  ],
  "openalex": "W7171854061",
  "pdf_url": "https://hal.science/hal-05854172/document",
  "pmcid": null,
  "pmid": null,
  "published": "2026-11-05",
  "publisher": null,
  "ris": "https://research.draconitic.com/paper/ac1tcbjhb3ytj.ris",
  "sources": [
    {
      "first_seen": "2026-11-06T12:20:44Z",
      "native_id": "hal-05854172",
      "source": "hal",
      "url": "https://hal.science/hal-05854172v1"
    }
  ],
  "subjects": [
    {
      "field": "mathematics",
      "origin": "hal:1.math.math-oc",
      "subfield": "optimisation-control"
    }
  ],
  "title": "Forcing and duality-corrected contracts for volatility control",
  "title_text": "Forcing and duality-corrected contracts for volatility control",
  "type": "preprint",
  "updated_at": "2026-11-07T12:20:25Z",
  "url": "https://research.draconitic.com/paper/ac1tcbjhb3ytj",
  "venue": "HAL",
  "versions": []
}