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Ranking of information systems in agency models: an integral condition

Author

Listed:
  • Claude Fluet

    () (UniversitÊ du QuÊbec Á MontrÊal, C.P. 8888, MontrÊal, H3C 3P8, CANADA)

  • Dominique Demougin

    () (Otto-von-Guericke UniversitÄt, UniversitÄtsplatz 2, 39106 Magdeburg, GERMANY)

Abstract

We provide a condition for ranking of information systems in agency problems. The condition has a straightforward economic interpretation in terms of the sensitivity of a cumulative distribution with respect to the agent's effort. The criterion is shown to be equivalent to the mean preserving spread condition on the likelihood ratio distributions.

Suggested Citation

  • Claude Fluet & Dominique Demougin, 2001. "Ranking of information systems in agency models: an integral condition," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 17(2), pages 489-496.
  • Handle: RePEc:spr:joecth:v:17:y:2001:i:2:p:489-496
    Note: Received: November 10, 1999; revised version: February 17, 2000
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    References listed on IDEAS

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    1. Dominique Demougin & Claude Fluet, 1998. "Mechanism Sufficient Statistic in the Risk-Neutral Agency Problem," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 154(4), pages 622-622, December.
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    Citations

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    Cited by:

    1. Xie, Jia, 2011. "Ranking of signals in multitask agency models," Economics Letters, Elsevier, vol. 112(1), pages 82-84, July.
    2. Marie-Cécile Fagart & Claude Fluet, 2009. "Liability insurance under the negligence rule," RAND Journal of Economics, RAND Corporation, vol. 40(3), pages 486-508.
    3. Jörg Budde, 2005. "Information in tournaments under limited liability," Bonn Econ Discussion Papers bgse21_2005, University of Bonn, Germany.
    4. Bernhard Eckwert & Itzhak Zilcha, 2007. "The Effect of Better Information on Income Inequality," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 32(2), pages 287-307, August.
    5. Marie-Cécile Fagart & Bernard Sinclair-Desgagné, 2002. "Auditing Policies and Information Systems in Principal-agent Analysis," Cahiers de recherche 02-02, HEC Montréal, Institut d'économie appliquée.
    6. Jörg Budde & Matthias Kräkel, 2011. "Limited liability and the risk–incentive relationship," Journal of Economics, Springer, vol. 102(2), pages 97-110, March.
    7. Marie-Cécile Fagart & Bernard Sinclair-Desgagné, 2007. "Ranking Contingent Monitoring Systems," Management Science, INFORMS, vol. 53(9), pages 1501-1509, September.
    8. Budde, Jörg, 2009. "Information in tournaments under limited liability," Journal of Mathematical Economics, Elsevier, vol. 45(1-2), pages 59-72, January.
    9. Dominique Demougin & Claude Fluet, 1999. "Costly Sanctions and the Maximum Penalty Principle," Cahiers de recherche CREFE / CREFE Working Papers 100, CREFE, Université du Québec à Montréal.
    10. Fluet, Claude, 2010. "Liability rules under evidentiary uncertainty," International Review of Law and Economics, Elsevier, vol. 30(1), pages 1-9, March.
    11. Dominique Demougin & Claude Fluet, 2000. "Prepondeance of the Evidence: Tort Rules and the Efficient Standard of Proof," Cahiers de recherche CREFE / CREFE Working Papers 120, CREFE, Université du Québec à Montréal.

    More about this item

    Keywords

    Moral hazard; Information systems.;

    JEL classification:

    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty

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