Asymmetric awareness and moral hazard

• 成果类型: Article
• 署名作者: Auster, Sarah
• 署名单位: European University Institute
• 刊物名称: GAMES AND ECONOMIC BEHAVIOR
• ISSN/ISSBN: 0899-8256
• DOI: 10.1016/j.geb.2013.08.011
• 发表日期: 2013
• 页码: 503-521
• 关键词: Unawareness; moral hazard; incomplete contracts

摘要

This paper introduces asymmetric awareness into the classical principal-agent model and discusses the optimal contract between a fully aware principal and an unaware agent. The principal enlarges the agent's awareness strategically when proposing a contract and faces a tradeoff between participation and incentives. Leaving the agent unaware allows the principal to exploit the agent's incomplete understanding of the world, relaxing the participation constraint, while making the agent aware enables the principal to use the revealed contingencies as signals about the agent's action choice, relaxing the incentive constraint. The optimal contract reveals contingencies that have low probability but are highly informative about the agent's effort. (C) 2013 Elsevier Inc. All rights reserved.