Information Control in the Principal-Agent Problem

Joel Sobel ()

International Economic Review, 1993, vol. 34, issue 2, 259-69

Abstract: This paper compares the principal's payoff in agency models under different assumptions about the agent's access to information. The agent may make decisions before (is uninformed) or after (is informed) learning the state of nature. When there are two possible outcomes, the principal typically prefers informed to uninformed agents, whether the agent receives the information before or after contracting. This result is false when there are more than two outcomes. Conditions under which a principal prefers one agent to another, when the agents differ only in their disutility of effort, are also given. Copyright 1993 by Economics Department of the University of Pennsylvania and the Osaka University Institute of Social and Economic Research Association.

Date: 1993
References: Add references at CitEc
Citations: View citations in EconPapers (33)

Downloads: (external link)
http://links.jstor.org/sici?sici=0020-6598%2819930 ... O%3B2-F&origin=repec full text (application/pdf)
Access to full text is restricted to JSTOR subscribers. See http://www.jstor.org for details.

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:ier:iecrev:v:34:y:1993:i:2:p:259-69

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0020-6598

Access Statistics for this article

International Economic Review is currently edited by Harold L. Cole

More articles in International Economic Review from Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association 160 McNeil Building, 3718 Locust Walk, Philadelphia, PA 19104-6297. Contact information at EDIRC.
Bibliographic data for series maintained by Wiley-Blackwell Digital Licensing () and ().