Ignorance in a multi-agent setting

Samuel C.A. Pereira

Economics Letters, 2009, vol. 105, issue 3, 264-266

Abstract: I extend the Demski and Sappington (1984) model to the case where the agents are with some exogenous probability ignorant. I show that an ignorant agent either is not exposed to risk or he receives a lower transfer when the other agent is the informed type the principal wants to discourage choosing the contract designed for an ignorant agent.

Keywords: Adverse; selection; Multi-agent; contracts; Information; acquisition; Mechanism; design (search for similar items in EconPapers)
Date: 2009
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