EconPapers    
Economics at your fingertips  
 

Gathering Information before Signing a Contract

Jacques Crémer () and Fahad Khalil

American Economic Review, 1992, vol. 82, issue 3, 566-78

Abstract: After being offered a contract, an agent has the possibility to observe the state of nature. This enables him to refuse the contract in unfavorable states but burdens him with an observation cost. The authors show that the principal offers a contract in which the agent has no incentive to observe the state of nature and they explore its terms. Later, they show that the principal finds it profitable to organize competition between several agents, even though he has monopoly power and can push a single agent down to his reservation utility. Copyright 1992 by American Economic Association.

Date: 1992
References: Add references at CitEc
Citations: View citations in EconPapers (141)

Downloads: (external link)
http://links.jstor.org/sici?sici=0002-8282%2819920 ... O%3B2-B&origin=repec full text (application/pdf)
Access to full text is restricted to JSTOR subscribers. See http://www.jstor.org for details.

Related works:
Working Paper: Gathering Information Before Signing a Contract (1991)
Working Paper: Gathering Information before Signing a Contract (1991) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:aea:aecrev:v:82:y:1992:i:3:p:566-78

Ordering information: This journal article can be ordered from
https://www.aeaweb.org/journals/subscriptions

Access Statistics for this article

American Economic Review is currently edited by Esther Duflo

More articles in American Economic Review from American Economic Association Contact information at EDIRC.
Bibliographic data for series maintained by Michael P. Albert ().

 
Page updated 2025-03-19
Handle: RePEc:aea:aecrev:v:82:y:1992:i:3:p:566-78