Informed principal and information gathering agent
- Authors
- Shin, Dongsoo; Yun, Sungho
- Issue Date
- Dec-2008
- Publisher
- SPRINGER HEIDELBERG
- Keywords
- Informed principal; Information gathering agent
- Citation
- REVIEW OF ECONOMIC DESIGN, v.12, no.4, pp.229 - 244
- Indexed
- SCIE
SCOPUS
- Journal Title
- REVIEW OF ECONOMIC DESIGN
- Volume
- 12
- Number
- 4
- Start Page
- 229
- End Page
- 244
- URI
- https://scholarworks.bwise.kr/erica/handle/2021.sw.erica/41939
- DOI
- 10.1007/s10058-008-0049-4
- ISSN
- 1434-4742
- Abstract
- We study a principal-agent model in which the principal has a production technology. The efficiency parameter of the principal's technology is not known to the agent. Alternatively, the principal can make the agent use a technology from a different channel. By gathering information at a cost, the agent can be informed privately of the efficiency of the technology that he may acquire from another source. We find that the principal requires the agent to adopt the principal's technology more (less) often when the cost of gathering information on the other technology is small (large). Also, with two states of nature, the outcome is first-best when the information gathering cost is intermediate.
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