Dimitri, Nicola - In: Journal of Institutional and Theoretical Economics (JITE) 155 (1999) 3, pp. 516-516
The paper introduces Knightian uncertainty, formalized by non-additive probabilities, within a simple agency model. The framework appears to be suitable to deal with issues like delegation in innovative firms. The paper stresses that, with Knightian uncertainty, if the principal is pessimistic...