Information and Delay in an Agency Model
Mikhail Drugov ()
No 298, Economics Series Working Papers from University of Oxford, Department of Economics
Negotiations often take long a time even if a delay in the agreement is inefficient. One typical explanation is the existence of private information of at least one party; the time is then a discriminating instrument. The paper starts by pointing out that this result does not hold once the traded quantity is not fixed as in most bargaining models; the quantity outperforms the time as a discriminating instrument, that is, there is no delay. Moreover, Coase conjecture does not hold either. We then study how a signal arriving in the course of negotiations affects the delay in the agreement. Unlike investment-under-uncertainty models, a better signal not only improves contracting in the future but also in the present. Therefore, the delay is in general not monotonic in the quality of information. The value of information can be negative over some range as better information may aggravate the principal`s commitment problem.
Keywords: Information; Adverse Selection; Delay; Bargaining; Coase Conjecture (search for similar items in EconPapers)
JEL-codes: D82 D83 L51 (search for similar items in EconPapers)
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)
Journal Article: Information and delay in an agency model (2010)
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:oxf:wpaper:298
Access Statistics for this paper
More papers in Economics Series Working Papers from University of Oxford, Department of Economics Contact information at EDIRC.
Bibliographic data for series maintained by Anne Pouliquen ( this e-mail address is bad, please contact ).