Articles

Articles

The Allocation of Authority and Information Revelation
  • Author
    Dongryul Lee (Sungshin University)
  • Year
    2014
  • Volume
    Vol.30
  • Number
    No.1
  • We study the allocation of authority and the possibility of information revelation in a
    principal-agent model where the principal faces both problems of adverse selection and
    moral hazard. We find that the consideration for information asymmetry and effort
    incentive for the agent makes the principal more likely delegate. Interestingly, we find that
    the informed agent has an ex-ante incentive to commit to reveal his information to the
    principal voluntarily if the information is hard.
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