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Designing contracts and information jointly

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  • Higashi, Kazuyuki

Abstract

We consider a Bayesian persuasion problem with hidden action. When the principal can decide on both information structure and monetary transfer, which relies on the stochastic output, then full separation or full pooling contract is optimal.

Suggested Citation

  • Higashi, Kazuyuki, 2024. "Designing contracts and information jointly," Economics Letters, Elsevier, vol. 242(C).
    • Handle: RePEc:eee:ecolet:v:242:y:2024:i:c:s0165176524003446
    DOI: 10.1016/j.econlet.2024.111860
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    References listed on IDEAS

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    1. Lewis, Tracy R. & Sappington, David E. M., 1991. "All-or-nothing information control," Economics Letters, Elsevier, vol. 37(2), pages 111-113, October.
    2. Emir Kamenica & Matthew Gentzkow, 2011. "Bayesian Persuasion," American Economic Review, American Economic Association, vol. 101(6), pages 2590-2615, October.
    3. Gottlieb, Daniel & Moreira, Humberto, 2022. "Simple contracts with adverse selection and moral hazard," Theoretical Economics, Econometric Society, vol. 17(3), July.
    4. Li, Cheng, 2017. "A model of Bayesian persuasion with transfers," Economics Letters, Elsevier, vol. 161(C), pages 93-95.
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