We analyze investment decisions when information is costly, with and without delegation to an agent. We use a rational …-inattention model and compare it with a canonical signal-extraction model. We identify three "investment conditions". In "sour …" conditions, no information is acquired and no investment made. In "sweet" conditions, investment is made "blindly", i.e. without …

current CEO who may have considerable power. Having signed a contract, the agent chooses how much effort to make to acquire … problem; how much information to acquire and what investment decision to make. As a consequence, the equilibrium contracts in … model E involve both bonuses and penalties. We identify lower and upper bounds on these, and study how the bonus and bonus …

exponential utility and cost of effort, each separating renegotiation-proof contract is characterized by a single "sensitivity …" parameter, which determines how the agent's promised utility varies with reported cash flows. The optimal contract among those …, and information revelation. -- Repeated Agency ; Asymmetric Information ; Persistent Information ; Contract Theory …

exponential utility and cost of effort, each separating renegotiation-proof contract is characterized by a single "sensitivity …" parameter, which determines how the agent's promised utility varies with reported cash flows. The optimal contract among those … information revelation. -- Repeated Agency ; Asymmetric Information ; Persistent Information ; Contract Theory ; Principal Agent …

about the asset? How do the disclosure rules of contract law influence the investigation decision? Shavell (1994) showed …-disclosure rule, which requires disclosure of material information, but only after the contract is concluded. We show that this rule … can be more efficient than both voluntary disclosure and mandatory (pre-contract) disclosure …

pressure. Nonetheless, when facing a penalty incentive scheme these individuals are more likely to choose to work with strict … term limits, suggesting that penalty contracts might generate adverse selection problems. …