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Contracts with endogenous information

Dezsoe Szalay ()

Games and Economic Behavior, 2009, vol. 65, issue 2, 586-625

Abstract: I study covert information acquisition and reporting in a principal agent problem allowing for general technologies of information acquisition. When posteriors satisfy two dimensional versions of the standard First Order Stochastic Dominance and Concavity/Convexity of the Distribution Function conditions, a first-order approach is justified. Under the same conditions, informativeness and riskiness of reports are equivalent. High powered contracts, that make the agent's informational rents more risky, are used to increase incentives for information acquisition, insensitive contracts are used to reduce incentives for information gathering. The value of information to the agent is always positive. The value of information to the principal is ambiguous.

Keywords: Asymmetric; information; Mechanism; design; Information; acquisition; Stochastic; ordering; Copula; Value; of; information (search for similar items in EconPapers)
Date: 2009
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Related works:
Working Paper: Contracts with Endogenous Information (2006) Downloads
Working Paper: Contracts with Endogenous Information (2006) Downloads
Working Paper: Contracts with Endogenous Information (2004) Downloads
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