Information Design with Agency

Eduardo Perez, Adrien Vigier and Jacopo Bizzotto

No 13868, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: We consider a general information design problem in which the task of producing information is delegated to an agent who can privately choose between the procedure designed by the principal and a default procedure. Procedures are constrained as to which messages they use, and possibly how they may be used. The principal can incentivize the agent via transfers conditioned on messages. This gives rise to a moral hazard problem in which the principal faces a trade-off between generating information that is persuasive in the continuation game, or generating information about the choice of the agent so as to lower the cost of agency. We provide a general methodology to solve such problems, and characterize an optimal procedure. We apply our results to information acquisition and persuasion examples.

Keywords: Information design; Moral hazard; Agency cost; Information acquisition (search for similar items in EconPapers)
JEL-codes: C72 D82 (search for similar items in EconPapers)
Date: 2019-07
New Economics Papers: this item is included in nep-des, nep-gth and nep-mic
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Related works:
Working Paper: Information Design with Agency (2020)
Working Paper: Information Design with Agency (2020)
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