Information acquisition and countervailing incentives
- Authors
- Shin, Dongsoo; Yun, Sungho
- Issue Date
- Aug-2023
- Publisher
- Elsevier BV
- Keywords
- Information acquisition; Countervailing incentives
- Citation
- Journal of Mathematical Economics, v.107, pp 1 - 13
- Pages
- 13
- Indexed
- SCIE
SSCI
SCOPUS
- Journal Title
- Journal of Mathematical Economics
- Volume
- 107
- Start Page
- 1
- End Page
- 13
- URI
- https://scholarworks.bwise.kr/erica/handle/2021.sw.erica/113007
- DOI
- 10.1016/j.jmateco.2023.102848
- ISSN
- 0304-4068
1873-1538
- Abstract
- In an agency model, we study how countervailing incentives, which lead to a "bunching" region of the optimal output schedule, are affected by costly information acquisition. We show that, when inducing the agent's information acquisition, the principal increases the value of information to the agent by squeezing and moving the bunching region toward the expected state, and completely removes the region for sufficiently large information acquisition costs. When deterring information acquisition, the principal reduces the value of information to the agent by distorting the optimal output upward or downward. We also analyze the optimality of inducing or deterring information acquisition in the presence of countervailing incentives. (c) 2023 Elsevier B.V. All rights reserved.
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