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Disclosure of status in an agency setting

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  • Marino, Anthony M.
  • Ozbas, Oguzhan

Abstract

We develop a model in which the principal and the agent share private information about the value of the agent for a multi-agent organization. The principal can disclose private information and make public the relative standing or status of all agents in the organization. We study whether it is better in terms of profit and utility to disclose or to not disclose status to the group of agents. Conditions for the optimality of disclosure versus non-disclosure are characterized for the cases of exogenous and endogenous human capital.

Suggested Citation

  • Marino, Anthony M. & Ozbas, Oguzhan, 2014. "Disclosure of status in an agency setting," Journal of Economic Behavior & Organization, Elsevier, vol. 105(C), pages 191-207.
    • Handle: RePEc:eee:jeborg:v:105:y:2014:i:c:p:191-207
    DOI: 10.1016/j.jebo.2014.05.002
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    References listed on IDEAS

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    1. Ed Hopkins & Tatiana Kornienko, 2004. "Running to Keep in the Same Place: Consumer Choice as a Game of Status," American Economic Review, American Economic Association, vol. 94(4), pages 1085-1107, September.
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    4. Ashraf, Nava & Bandiera, Oriana & Lee, Scott S., 2014. "Awards unbundled: Evidence from a natural field experiment," Journal of Economic Behavior & Organization, Elsevier, vol. 100(C), pages 44-63.
    5. Marino, Anthony M., 2014. "Transparency in agency: The constant elasticity case and extensions," International Journal of Industrial Organization, Elsevier, vol. 33(C), pages 9-21.
    6. Aoyagi, Masaki, 2010. "Information feedback in a dynamic tournament," Games and Economic Behavior, Elsevier, vol. 70(2), pages 242-260, November.
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    Cited by:

    1. Goulart, Marco & da Costa, Newton C.A. & Andrade, Eduardo B. & Santos, André A.P., 2015. "Hedging against embarrassment," Journal of Economic Behavior & Organization, Elsevier, vol. 116(C), pages 310-318.
    2. Jinke Li & Geoffrey Meen, 2016. "Agent Based Models, Housing Fluctuations and the Role of Heterogeneous Expectations," Economics Discussion Papers em-dp2016-09, Department of Economics, University of Reading.
    3. Kerstin Lopatta & Mario Albert Gloger & Reemda Jaeschke, 2017. "Can Language Predict Bankruptcy? The Explanatory Power of Tone in 10‐K Filings," Accounting Perspectives, John Wiley & Sons, vol. 16(4), pages 315-343, December.
    4. Geoffrey Meen & Alexander Mihailov & Yehui Wang, 2016. "Endogenous UK Housing Cycles and the Risk Premium: Understanding the Next Housing Crisis," Economics Discussion Papers em-dp2016-02, Department of Economics, University of Reading.
    5. Auriol, Emmanuelle & Friebel, Guido & von Bieberstein, Frauke, 2016. "The firm as the locus of social comparisons: Standard promotion practices versus up-or-out," Journal of Economic Behavior & Organization, Elsevier, vol. 121(C), pages 41-59.

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    More about this item

    Keywords

    Status; Disclosure; Human capital;
    All these keywords.

    JEL classification:

    • D1 - Microeconomics - - Household Behavior
    • D2 - Microeconomics - - Production and Organizations
    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
    • L - Industrial Organization
    • L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior
    • M5 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics

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