The Value of Information in a Principal-Agent Model with Moral Hazard and Ex Ante Contracting
نویسنده
چکیده
We examine a principal-agent model with moral hazard in which, after contracting, the principal receives a signal correlated with the technology. We call this ex ante contracting and examine the value of information both when the principal has private information and when information is public. We show that: (i) the principal prefers private information to no information; (ii) the principal prefers public to private information if and only if the principal finds it optimal to implement different actions; (iii) the value of information is non-monotonic with both private and public information; and (iv) the value of information may be larger or smaller with public than with private information. An important consequence of the second result is that the value of public information may be negative.
منابع مشابه
The Value of Information in an Agency Model with Moral Hazard
In a principal-agent environment with moral hazard and symmetric information, having or acquiring a more informative technology lowers the cost to implement a given action. Contracting may occur after or before the principal learns her technology. We show that when the principal has or will acquire private information about her technology, (i) with ex post contracting, the value of information ...
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