Abstract
I study information gathering for rent-seeking purposes in contracting. In my model, an agent learns his payoff type only after accepting a contract, but can at costs acquire imperfect information while deliberating whether to accept. I show that the principal deters the acquisition if and only if the costs are high. The result stands in contrast to a finding by Cremer and Khalil (1992), who demonstrate that the acquisition of perfect information will always be deterred. A key insight is that the case of imperfect information is an instance of a sequential-screening problem. (C) 2016 Elsevier Inc. All rights reserved.
Original language | English |
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Pages (from-to) | 70-87 |
Number of pages | 18 |
Journal | Games and Economic Behavior |
Volume | 97 |
DOIs | |
Publication status | Published - May 2016 |
Keywords
- Principal agent
- Information acquisition
- Rent seeking
- Sequential screening
- MECHANISM DESIGN
- OPTIMAL AUCTIONS
- ACQUISITION