Asymmetric Monitoring: Good Versus Bad News Verification
We analyze a principal-agent setting with multiple sources of contracting information in which the signal from each source can be unmistakably interpreted as “good” or “bad” news. We then ask whether it is best to condition the acquisition of one of the information sources on whether the earlier reporting source has reported “good” or “bad” news. That is, is it efficient to “chase the good news” or to “chase the bad news”? The answer depends on whether the earlier source is publicly observed or self-reported by the agent. We also explore ties to institutional features, and in particular conservative accounting treatments.
Volume (Year): 56 (2004)
Issue (Month): 3 (July)
|Contact details of provider:|| Postal: |
Phone: 0049 89 2180 2166
Fax: 0049 89 2180 6327
Web page: http://www.sbr-online.com
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:sbr:abstra:v:56:y:2004:i:3:p:206-222. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (sbr)The email address of this maintainer does not seem to be valid anymore. Please ask sbr to update the entry or send us the correct address
If references are entirely missing, you can add them using this form.