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A central insight of agency theory is that when a principal offers a contract to a privately informed agent, the … particular, we investigate settings with both exogenous and endogenous information structures. We find that theory is indeed a …
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In this paper the impact of noise on dynamic adverse selection in principal-agent relationships is examined. Significant deviations in terms of equilibrium actions and payments occur, when compared to deterministic environments. Information dissipates slowly, so payments to agents who stand to...
Persistent link: https://www.econbiz.de/10014202377
The impact of information dissemination and experimentation on dynamic adverse selection in noisy agency relationships is examined. Significant deviations in terms of equilibrium actions and payments occur, when compared to deterministic environments. Information dissipates slowly, so payments...
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I show that stochastic contracts generate powerful incentives when agents suffer from probability distortion. When …
Persistent link: https://www.econbiz.de/10015053193