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Kim, Doyoung - In: International Journal of Industrial Organization 31 (2013) 5, pp. 488-500

An agent may manipulate information when transmitting it to the principal. A direct response to this problem is to verify the information. The paper explores a situation where the principal engages in information verification herself or alternatively delegates it to the agent. The paper finds...

Persistent link: https://www.econbiz.de/10010730052

On Moral Hazard and Persistent Private Information

Vasama, Suvi - 2017

incentives at the optimal contract can be captured using two state variables: the agent's continuation value and his information … rent. The optimal contract uses a combination of nonnegative payments and inefficient liquidation threat to provide the …

Persistent link: https://www.econbiz.de/10012950499

Optimality of Securitized Debt with Endogenous and Flexible Information Acquisition

Yang, Ming - 2011

An issuer designs a contract and agents flexibly acquire information when deciding whether to accept it and provide … collect the most relevant information that is determined by the "shape" of the contract. Thus in order to reduce the effect of … adverse selection, the issuer designs the contract to avoid information acquisition, or induce her counterparty to acquire …

Persistent link: https://www.econbiz.de/10014180333

Learning by Consuming : Optimal Pricing with Endogenous Information Provision

Guo, Huiyi; He, Wei; Liu, Bin - 2022

We study the revenue-maximizing mechanism when a buyer’s value evolves endogenously because of learning-by-consuming. A seller sells one unit of a divisible good, while the buyer relies on his private, rough valuation to choose his first-stage consumption level. Consuming more leads to a more...

Persistent link: https://www.econbiz.de/10013491620

Precontractual Investigation and Sequential Screening

Terstiege, Stefan - Volkswirtschaftliche Fakultät, … - 2013

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 …

Persistent link: https://www.econbiz.de/10010700800

The Role of Private Benefits in Information Acquisition

Hori, Kazumi - 2010

In many cases, the cost of an agent acquiring information is lower than that for the principal. However, because of a private benefit difference between the principal's and agent's preferences, the principal often cannot fully utilize the agent's advantage. This paper considers the cost of...

Persistent link: https://www.econbiz.de/10013143385

Optimal Auctions with Information Acquisition

Shi, Xianwen - University of Toronto, Department of Economics - 2007

This paper studies optimal auction design in a private value setting with endogenous information acquisition. First, we develop a general framework for modeling information acquisition when a seller wants to sell an object to one of several potential buyers who can each gather information about...

Persistent link: https://www.econbiz.de/10005704763

Endogenous information and stochastic contracts

Terstiege, Stefan - In: Games and Economic Behavior 76 (2012) 2, pp. 535-547

information before they decide whether to join the contract. It is conjectured that the results also apply to the more natural …

Persistent link: https://www.econbiz.de/10010588265

Optimal auctions with information acquisition

Shi, Xianwen - In: Games and Economic Behavior 74 (2012) 2, pp. 666-686

This paper studies optimal auction design in a private value setting with endogenous information gathering. We develop a general framework for modeling information acquisition when a seller wants to sell an object to one of several potential buyers, who can each gather information about their...

Persistent link: https://www.econbiz.de/10011049869

Credence goods, costly diagnosis, and subjective evaluation

Bester, Helmut; Dahm, Matthias - Fachbereich Wirtschaftswissenschaft, Freie Universität … - 2014

We study contracting between a consumer and an expert. The expert can invest in diagnosis to obtain a noisy signal about whether a low-cost service is sufficient or whether a high-cost treatment is required to solve the consumer´s problem. This involves moral hazard because diagnosis effort and...

Persistent link: https://www.econbiz.de/10011076238