Information Asymmetry: Adverse Selection

Jaeyoung Sung
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Jaeyoung Sung: Ajou University

Chapter Chapter 16 in Contract Theory: Discrete- and Continuous-Time Models, 2023, pp 273-287 from Springer

Abstract: Abstract We study the agent’s precontractual opportunism with some elementary concepts of adverse selection, including the revelation principle and the information rent, by using the Laffont and TiroleLaffont, J. Trole, J. (1986) discrete-time procurement model under fullFull commitment commitment. We apply their model to cases where the agent’s talent is known to himself, but unknown to the principal, and the distribution of the unknown talent is either binomial or continuous.

Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-981-99-5487-2_16

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DOI: 10.1007/978-981-99-5487-2_16

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