Informed Principal and Countervailing Incentives
It has been shown by Maskin and Tirole (1990, proposition 11) that with quasi-linear preferences and private values, an informed principal neither gains nor loses if her private information is revealed before contracting takes place. The note shows that this result may not hold when the agent faces countervailing incentives.
|Date of creation:||Feb 2007|
|Date of revision:|
|Publication status:||Published in Economics Letters, Elsevier, 2007, 94 (2), pp.240-244. <10.1016/j.econlet.2006.06.039>|
|Note:||View the original document on HAL open archive server: https://hal.archives-ouvertes.fr/hal-00607075|
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- Roger B. Myerson, 1981.
"Mechanism Design by an Informed Principal,"
481, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- Maggi G. & Rodriguez-Clare A., 1995. "On Countervailing Incentives," Journal of Economic Theory, Elsevier, vol. 66(1), pages 238-263, June.
- Michela Cella, 2006.
"Informed Principal with Correlation,"
Economics Series Working Papers
261, University of Oxford, Department of Economics.
- Lewis, Tracy R. & Sappington, David E. M., 1989. "Countervailing incentives in agency problems," Journal of Economic Theory, Elsevier, vol. 49(2), pages 294-313, December.
- Maskin, Eric & Tirole, Jean, 1990. "The Principal-Agent Relationship with an Informed Principal: The Case of Private Values," Econometrica, Econometric Society, vol. 58(2), pages 379-409, March.
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