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...

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...

In a principal-agent setup, we investigate agents disclosure of conflict of interests revealing deliberate or undeliberate kindness and its affect on principals reciprocal behavior. To this end, we firstly introduce a theoretical model refering to Hart and Moore (2008) which captures aspects of...