DP7331 The Costs and Benefits of Additional Information in Agency Models with Endogenous Information Structures

Author(s): Eva I Hoppe, Patrick W. Schmitz
Publication Date: June 2009
Keyword(s): adverse selection, Hidden information, information gathering
JEL(s): C72, D82, D86
Programme Areas: Industrial Organization
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=7331

We study the effect of additional private information in an agency model with an endogenous information structure. If more private information becomes available to the agent, this may hurt the agent, benefit the principal, and affect the total surplus ambiguously.