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dc.contributor.authorAUSTER, Sarah
dc.date.accessioned2014-01-09T12:33:54Z
dc.date.available2014-01-09T12:33:54Z
dc.date.issued2013
dc.identifier.citationGames and Economic Behavior, 2013, Vol. 82, pp. 503-521en
dc.identifier.issn1090-2473
dc.identifier.issn0899-8256
dc.identifier.urihttp://hdl.handle.net/1814/29178
dc.descriptionReceived 8 June 2012 Available online 10 September 2013en
dc.description.abstractThis 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.en
dc.language.isoenen
dc.relation.ispartofGames and Economic Behavioren
dc.titleAsymmetric awareness and moral hazarden
dc.typeArticleen
dc.identifier.doi10.1016/j.geb.2013.08.011
dc.identifier.volume82en
dc.identifier.startpage503en
dc.identifier.endpage521en
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