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|
|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|
|Contact details of provider:|| Web page: https://hal.archives-ouvertes.fr/|
References listed on IDEAS
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- 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.
- 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.
- Roger B. Myerson, 1981.
"Mechanism Design by an Informed Principal,"
481, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- 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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