Paying for not Buying: Incentive Contracts with Endogenous Information Acquisition

Natalia Kovrijnykh () and Hector Chade

No 653, 2010 Meeting Papers from Society for Economic Dynamics

Abstract: We show that when the prior that the return is high is below (above) a half, the agent is rewarded for low (high) signals. This is problematic if the agent can hide options, because then he might show only low signals. The possibility of hiding endogenously affects current and future information quality.

Date: 2010
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Persistent link: https://EconPapers.repec.org/RePEc:red:sed010:653

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