Arbeitspapier
Optimal Delegated Search with Adverse Selection and Moral Hazard
The paper studies a model of delegated search. The distribution of search revenues is unknown to the principal and has to be elicited from the agent in order to design the optimal search policy. At the same time, the search process is unobservable, requiring search to be self-enforcing. The two information asymmetries are mutually enforcing each other; if one is relaxed, delegated search is efficient. With both asymmetries prevailing simultaneously, search is almost surely inefficient (it is stopped too early). Second-best remuneration is shown to optimally utilize a menu of simple bonus contracts. In contrast to standard adverse selection problems, indirect nonlinear tariffs are strictly dominated.
- Language
-
Englisch
- Bibliographic citation
-
Series: SFB/TR 15 Discussion Paper ; No. 462
- Classification
-
Wirtschaft
Asymmetric and Private Information; Mechanism Design
Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
Economics of Contract: Theory
Noncooperative Games
- Subject
-
adverse selection
bonus contracts
delegated search
moral hazard
optimal stopping
- Event
-
Geistige Schöpfung
- (who)
-
Ulbricht, Robert
- Event
-
Veröffentlichung
- (who)
-
Sonderforschungsbereich/Transregio 15 - Governance and the Efficiency of Economic Systems (GESY)
- (where)
-
München
- (when)
-
2014
- DOI
-
doi:10.5282/ubm/epub.20865
- Handle
- URN
-
urn:nbn:de:bvb:19-epub-20865-2
- Last update
-
10.03.2025, 11:42 AM CET
Data provider
This object is provided by:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Ulbricht, Robert
- Sonderforschungsbereich/Transregio 15 - Governance and the Efficiency of Economic Systems (GESY)
Time of origin
- 2014
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