Delegation to a potentially uninformed agent
AbstractWe consider a delegation problem with a biased and potentially uninformed agent when the principal cannot use monetary payments. If the bias between the principal and the agent is large then the optimal delegation set is an interval. When the bias is small or medium the optimal delegation set is no longer connected. It can be one of two types: 1) with an interval and low option, 2) with two intervals. In all cases the agent has less discretion. However, in the case of medium bias the principal delegates in a wider range than in the case of an informed agent
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Bibliographic InfoPaper provided by University of Ottawa, Department of Economics in its series Working Papers with number 1215E.
Length: 17 pages
Date of creation: 2012
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More information through EDIRC
energy; Information; bias; non-informed agent; delegation set;
Find related papers by JEL classification:
- D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
- D86 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Economics of Contract Law
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-12-06 (All new papers)
- NEP-CTA-2012-12-06 (Contract Theory & Applications)
- NEP-MIC-2012-12-06 (Microeconomics)
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