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Contracts and Productive Information Gathering

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  • Cremer, Jacques
  • Khalil, Fahad
  • Rochet, Jean-Charles

Abstract

We modify a standard Baron-Myerson model by assuming that, instead of knowing the state of nature, the agent has to incur a cost, (g) , to learn it. Under these conditions, the principal will offer contracts that, depending on the value of (g), incite the agent to gather or not to gather information. We study tradeoffs that are involved

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Bibliographic Info

Article provided by Elsevier in its journal Games and Economic Behavior.

Volume (Year): 25 (1998)
Issue (Month): 2 (November)
Pages: 174-193

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Handle: RePEc:eee:gamebe:v:25:y:1998:i:2:p:174-193

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Web page: http://www.elsevier.com/locate/inca/622836

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  12. Cremer, J. & Khalil, F., 1991. "Gathering Information Before Signing a Contract," Discussion Papers in Economics at the University of Washington 91-16, Department of Economics at the University of Washington.
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  14. Lewis, Tracy R. & Sappington, David E. M., 1991. "All-or-nothing information control," Economics Letters, Elsevier, vol. 37(2), pages 111-113, October.
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  16. Lewis Tracy R. & Sappington David E. M., 1993. "Ignorance in Agency Problems," Journal of Economic Theory, Elsevier, vol. 61(1), pages 169-183, October.
  17. Jean-Charles Rochet & Philippe Chone, 1998. "Ironing, Sweeping, and Multidimensional Screening," Econometrica, Econometric Society, vol. 66(4), pages 783-826, July.
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