Contracts with endogenous information
Szalay, Dezsoe. (2009) Contracts with endogenous information. Games and Economic Behavior, Vol.65 (No.2). pp. 586-625. ISSN 0899-8256Full text not available from this repository.
Official URL: http://dx.doi.org/10.1016/j.geb.2008.01.012
I study covert information acquisition and reporting in a principal agent problem allowing for general technologies of information acquisition. When posteriors satisfy two dimensional versions of the standard First Order Stochastic Dominance and Concavity/Convexity of the Distribution Function conditions, a first-order approach is justified. Under the same conditions, in fort nativeness and riskiness of reports are equivalent. High powered contracts, that make the agent's informational rents more risky, are used to increase incentives for information acquisition, insensitive contracts are used to reduce incentives for information gathering. The value of information to the agent is always positive. The value of information to the principal is ambiguous. (C) 2008 Elsevier Inc. All rights reserved.
|Item Type:||Journal Article|
|Subjects:||H Social Sciences > HC Economic History and Conditions|
|Divisions:||Faculty of Social Sciences > Economics|
|Journal or Publication Title:||Games and Economic Behavior|
|Official Date:||March 2009|
|Number of Pages:||40|
|Page Range:||pp. 586-625|
|Access rights to Published version:||Restricted or Subscription Access|
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