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- Title
Contracting over persistent information.
- Authors
Zhao, Wei; Mezzetti, Claudio; Renou, Ludovic; Tomala, Tristan
- Abstract
We consider a dynamic principal‐agent problem, where the sole instrument the principal has to incentivize the agent is the disclosure of information. The principal aims at maximizing the (discounted) number of times the agent chooses the principal's preferred action. We show that there exists an optimal policy, where the principal recommends its most preferred action and discloses information as a reward in the next period, until either this action becomes statically optimal for the agent or the agent perfectly learns the state.
- Subjects
DISCLOSURE; AGENCY (Law); CONTRACTS
- Publication
Theoretical Economics, 2024, Vol 19, Issue 2, p917
- ISSN
1555-7561
- Publication type
Article
- DOI
10.3982/TE5056