Information acquisition and countervailing incentives

Dongsoo Shin and Sungho Yun

Journal of Mathematical Economics, 2023, vol. 107, issue C

Abstract: In an agency model, we study how countervailing incentives, which lead to a “bunching” region of the optimal output schedule, are affected by costly information acquisition. We show that, when inducing the agent’s information acquisition, the principal increases the value of information to the agent by squeezing and moving the bunching region toward the expected state, and completely removes the region for sufficiently large information acquisition costs. When deterring information acquisition, the principal reduces the value of information to the agent by distorting the optimal output upward or downward. We also analyze the optimality of inducing or deterring information acquisition in the presence of countervailing incentives.

Keywords: Information acquisition; Countervailing incentives (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0304406823000411
Full text for ScienceDirect subscribers only

Related works:
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:mateco:v:107:y:2023:i:c:s0304406823000411

DOI: 10.1016/j.jmateco.2023.102848

Access Statistics for this article

Journal of Mathematical Economics is currently edited by Atsushi (A.) Kajii

More articles in Journal of Mathematical Economics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().