Screening Ethics when Honest Agents Keep their Word
We study the implications of honesty when it requires pre-commitment. Within a two-period hidden information problem, an agent learns his match with the assigned task in period 2 and, if honest, reveals it to the principal if he has committed to it. The principal may offer a menu of contracts to screen ethics. Both honest and dishonest agents are willing to misrepresent their ethics. The principal and dishonest agents benefit from an increased likelihood of honesty as long as honesty is likely enough. Honest agents always profit from ethics uncertainty if a good match is likely. This is also true if dishonesty is likely enough, in which case an honest receives the same surplus as a dishonest.
|Date of creation:||15 Jun 2003|
|Date of revision:||09 Nov 2004|
|Contact details of provider:|| Postal: Boston College, 140 Commonwealth Avenue, Chestnut Hill MA 02467 USA|
Web page: http://fmwww.bc.edu/EC/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Daniel S. Nagin & James B. Rebitzer & Seth Sanders & Lowell J. Taylor, 2002.
"Monitoring, Motivation, and Management: The Determinants of Opportunistic Behavior in a Field Experiment,"
American Economic Review,
American Economic Association, vol. 92(4), pages 850-873, September.
- Daniel Nagin & James Rebitzer & Seth Sanders & Lowell Taylor, 2002. "Monitoring, Motivation and Management: The Determinants of Opportunistic Behavior in a Field Experiment," NBER Working Papers 8811, National Bureau of Economic Research, Inc.
- F. Forges & Frederic Koessler, 2003.
"Communication Equilibria with Partially Verifiable Types,"
THEMA Working Papers
2003-10, THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise.
- Forges, Francoise & Koessler, Frederic, 2005. "Communication equilibria with partially verifiable types," Journal of Mathematical Economics, Elsevier, vol. 41(7), pages 793-811, November.
- Ingela Alger & Ching-to Albert Ma, 2001.
"Moral Hazard, Insurance, and Some Collusion,"
Boston College Working Papers in Economics
496, Boston College Department of Economics.
- Kofman, F. & Lawarree, J., 1993.
"On the Optimality of Allowing Collusion,"
93-02, University of Washington, Department of Economics.
- Kofman, F. & Lawarree, J., 1993. "On the Optimality of Allowing Collusion," Discussion Papers in Economics at the University of Washington 93-02, Department of Economics at the University of Washington.
- repec:dau:papers:123456789/168 is not listed on IDEAS
- Dwight M. Jaffee & Thomas Russell, 1976. "Imperfect Information, Uncertainty, and Credit Rationing," The Quarterly Journal of Economics, Oxford University Press, vol. 90(4), pages 651-666.
- Jerry R. Green & Jean-Jacques Laffont, 1986. "Partially Verifiable Information and Mechanism Design," Review of Economic Studies, Oxford University Press, vol. 53(3), pages 447-456.
- Picard, Pierre, 1996. "Auditing claims in the insurance market with fraud: The credibility issue," Journal of Public Economics, Elsevier, vol. 63(1), pages 27-56, December.
- Deneckere,R. & Severinov,S., 2001. "Mechanism design and communication costs," Working papers 23, Wisconsin Madison - Social Systems.
- Ingela Alger & Regis Renault, 2000.
"Screening Ethics when Honest Agents Care about Fairness,"
Boston College Working Papers in Economics
489, Boston College Department of Economics, revised 09 Nov 2004.
- Ingela Alger & Régis Renault, 2006. "Screening Ethics When Honest Agents Care About Fairness ," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 47(1), pages 59-85, 02.
When requesting a correction, please mention this item's handle: RePEc:boc:bocoec:562. 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: (Christopher F Baum)
If references are entirely missing, you can add them using this form.