Common agency with risk-averse agent
AbstractIn a common agency model with a risk-averse agent and private information distortion in the equilibrium policy from the first-best is greater compared to the case of a risk-neutral agent. The principals are unable to screen completely the agent's preferences if he is sufficiently risk-averse: there is bunching in the contract. The contribution schedules keep track of informational externality. However, when the coefficient of risk-aversion goes to zero the contributions become truthful as in the complete information case.
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Bibliographic InfoArticle provided by Elsevier in its journal Journal of Mathematical Economics.
Volume (Year): 46 (2010)
Issue (Month): 1 (January)
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Web page: http://www.elsevier.com/locate/jmateco
Common agency Asymmetric information Risk-aversion;
Other versions of this item:
- D8 - Microeconomics - - Information, Knowledge, and Uncertainty
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