Moral Hazard and Observability
The role of imperfect information in a principal-agent relationship subject to moral hazard is considered. A necessary and sufficient condition for imperfect information to improve on contracts based on the payoff alone is derived, and a characterization of the optimal use of such information is given.
Year of publication: |
1979
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Authors: | Holmstrom, Bengt |
Published in: |
Bell Journal of Economics. - The RAND Corporation, ISSN 0361-915X. - Vol. 10.1979, 1, p. 74-91
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Publisher: |
The RAND Corporation |
Saved in:
Online Resource
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