Common agency with risk-averse agent

Aggey Semenov

Journal of Mathematical Economics, 2010, vol. 46, issue 1, 38-49

Abstract: In a common agency model with a risk-averse agent and private information distortion in the equilibrium policy from the first-best is greater compared to the case of a risk-neutral agent. The principals are unable to screen completely the agent's preferences if he is sufficiently risk-averse: there is bunching in the contract. The contribution schedules keep track of informational externality. However, when the coefficient of risk-aversion goes to zero the contributions become truthful as in the complete information case.

Keywords: Common; agency; Asymmetric; information; Risk-aversion (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (1)

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Working Paper: Common Agency with Risk-Averse Agent (2006)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:mateco:v:46:y:2010:i:1:p:38-49

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