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Révélation de l’information par un principal au budget limité

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  • Antoine Prévet

Abstract

Moral hazard may require the use of very high ex post bonuses.?However, this is not feasible in circumstances where performance does not translate immediately in monetary benefit for the principal such as the public sector and incentives cannot be insured through sharing profits.?This article shows how information revelation can be strategically used by the principal in such constrained situations to maximize her profits.?In a principal-agent model with moral hazard and bounds on transfers, I study an information design problem where the principal can choose, or not, to reveal the productivity of the effort.?I show that transparency is more likely to be optimal for the principal the less valuable the task is and the lower the budget is. Classification JEL : D23, D81, D82, D86.

Suggested Citation

  • Antoine Prévet, 2018. "Révélation de l’information par un principal au budget limité," Revue économique, Presses de Sciences-Po, vol. 69(5), pages 709-722.
    • Handle: RePEc:cai:recosp:reco_695_0709
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    More about this item

    Keywords

    moral hazard; limited liability; information design; budget constraint;
    All these keywords.

    JEL classification:

    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • D86 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Economics of Contract Law

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