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intolerance for lying the optimal mechanism is discontinuously altered. It may still involve ethics screening whereby some …. With limited intolerance for lying, ethics screening allows for doing better than in the standard setup where the agent is …
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. Even the slightest intolerance for lying prevents full ethics screening whereby the agent is given proper incentives if … dishonest and zero rent if honest. Still, some partial ethics screening may allow for taking advantage of the potential honesty …
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to screen ethics. Both honest and dishonest agents are willing to misrepresent their ethics. Equilibrium ethics screening …
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Should contract design induce an agent to conduct a precontractual investigation even though, in any case, the agent will become fully informed after the signing of the contract? This paper shows that imperfect investigations might be encouraged. The result stands in contrast to previous...
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