Information Acquisition, Referral, and Organization
Simona Grassi () and
Ching-to Ma ()
Additional contact information
Simona Grassi: UniversitÃˆ de Lausanne
No wp2016-005, Boston University - Department of Economics - Working Papers Series from Boston University - Department of Economics
Each of two experts may provide a service to a client. ExpertsÃcost comparative advantage depends on an unknown state, but an expert may exert eÂ§ort to get a private signal about it. In a market, an expert may refer the client to the other for a fee. In equilibrium, only one expert exerts eÂ§ort and refers, and the equilibrium allocation is ineÂ¢ cient. Referral eÂ¢ ciency can be restored when experts form an organization, in which a referring expert must bear the referred expertÃs cost. However, the referred expert shirks from work eÂ§ort because of the lack of cost responsibility.
Keywords: information acquisition; referral; organization; adverse selection; cost-reduction incentive (search for similar items in EconPapers)
JEL-codes: D00 D02 D80 D83 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-hrm and nep-mic
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2) Track citations by RSS feed
Downloads: (external link)
Journal Article: Information acquisition, referral, and organization (2016)
Working Paper: Information Acquisition, Referral, and Organization (2015)
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:bos:wpaper:wp2016-005
Access Statistics for this paper
More papers in Boston University - Department of Economics - Working Papers Series from Boston University - Department of Economics Contact information at EDIRC.
Bibliographic data for series maintained by Program Coordinator ().