Optimal contract for outsourcing information acquisition

Jin Hyuk Choi and Kookyoung Han

Economics Letters, 2020, vol. 195, issue C

Abstract: We consider how a principal can optimally outsource information acquisition to an agent in a dynamic environment when the principal can observe neither the agent’s effort of collecting information nor signal realizations. Neither initial transaction nor interim payments are allowed to prevent the principal from effectively delegating her decision to the agent. Focusing on scoring rules, we find a contract that allows the principal to achieve the first best: the principal can induce the agent not only to exert effort but also to report a right belief at the right time.

Keywords: Information acquisition; Optimal contract; Optimal stopping; Private observation (search for similar items in EconPapers)
JEL-codes: C41 D82 D83 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:195:y:2020:i:c:s0165176520302755

DOI: 10.1016/j.econlet.2020.109443

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