Ranking of Information Systems in Agency Models: An Integral Condition

Dominique Demougin () and Claude Fluet ()

No 70, Cahiers de recherche CREFE / CREFE Working Papers from CREFE, Université du Québec à Montréal

Abstract: We provide an integral condition for the ranking of general information systems in the agency problem. The condition has a straightforward economic interpretation in terms of the sensitivity of a cumulative distribution with respect to the agent's effort. The proposed criterion is shown to be equivalent to Kim's preserving spread condition on the likelihood ratio distributions

Nous présentons un critère intégral pour le classement des systèmes d'information dans les problèmes principal-agent. Le critère proposé a une interprétation intuitive en ce qu'il caractérise la sensibilité d'une fonction de répartition par rapport au niveau d'effort de l'agent. Nous montrons que ce critère est équivalent au critère de Kim défini sur la base d'un accroissement de risque des ratios de vraisemblance.

Keywords: agency problem; information systems; likelihood ratio; mean preserving spread criterion; integral criterion (search for similar items in EconPapers)
JEL-codes: D82 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-mic and nep-pol
Date: 1998-11
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