Pessimistic information gathering

Elisabetta Iossa and David Martimort

Games and Economic Behavior, 2015, vol. 91, issue C, 75-96

Abstract: An agent gathers information on productivity shocks and accordingly produces on behalf of a principal. Information gathering is imperfect and whether it succeeds or not depends on the agent's effort. Contracting frictions come from the fact that the agent is pessimistic on the issue of information gathering, and there are both moral hazard in information gathering, private information on productivity shocks and moral hazard on operating effort. An optimal menu of linear contracts mixes high-powered, productivity-dependent screening options following “good news” with a fixed low-powered option otherwise.

Keywords: Information gathering; Moral hazard; Asymmetric information; Pessimism (search for similar items in EconPapers)
JEL-codes: D82 H41 (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (21)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0899825615000639
Full text for ScienceDirect subscribers only

Related works:
Working Paper: Pessimistic information gathering (2015)
Working Paper: Pessimistic information gathering (2015)
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:eee:gamebe:v:91:y:2015:i:c:p:75-96

DOI: 10.1016/j.geb.2015.03.014

Access Statistics for this article

Games and Economic Behavior is currently edited by E. Kalai

More articles in Games and Economic Behavior from Elsevier
Bibliographic data for series maintained by Catherine Liu ().