Contracting with a naïve time-inconsistent agent: To exploit or not to exploit?
Mathematical Social Sciences, 2015, vol. 77, issue C, 46-51
In a repeated principal–agent model with moral hazard, in which the agent has βδ-preferences, we analyze the case where the agent is naïve in the sense that he is not fully aware of his inconsistent discounting. We consider the possibility of principal manipulating the naïveté of the agent. Surprisingly, when the principal wants to implement the high effort, there are no gains to the principal from the naïveté of the agent and the principal does not choose to deceive the agent. The principal’s maximum utility is the same from a sophisticated agent and from a naïve agent.
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed
Downloads: (external link)
Full text for ScienceDirect subscribers only
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:eee:matsoc:v:77:y:2015:i:c:p:46-51
Access Statistics for this article
Mathematical Social Sciences is currently edited by J.-F. Laslier
More articles in Mathematical Social Sciences from Elsevier
Bibliographic data for series maintained by Catherine Liu ().