Costless Information and Costly Verification
A Case for Transparency
Bibliographic Data
| ID | 10171858 |
|---|---|
| Authors | Deniz Kattwinkel (University College London), Jan Knoepfle (0009-0005-5198-2651, Queen Mary University of London) |
| Year | 2022 |
| Volume | 131 |
| Issue | 2 |
| Pages | 504-548 |
| Publication date | 2022-06-29 |
| Open Access | No |
| Type | ARTICLE |
| Venue | Journal of Political Economy (JOURNAL) |
| Journal identifiers | ISSN: 0022-3808 • E-ISSN: 1537-534X |
| Publisher | University of Chicago Press (PUBLISHER • US) |
| DOI | 10.1086/721618 |
| OpenAlex | W3125759261 |
| Language | EN |
| Citations received | 1 |
| References cited | 43 |
A principal has to take a binary decision. She relies on information privately held by an agent who prefers the same action regardless of his type. The principal cannot incentivize with transfers but can learn the agent's type at a cost. Additionally, the principal privately observes a signal correlated with the agent's type. Transparent mechanisms are optimal: the principal's payoff is the same as if her signal was public. A simple cutoff form is optimal: favorable signals ensure the agent's preferred action. Signals below this cutoff lead to the nonpreferred action unless the agent appeals. An appeal always triggers type verification
Action (physics · Appeal · Binary number · Computer security · Economics · Information asymmetry · Mathematical economics · Microeconomics · Principal (computer security · Principal–agent problem · SIGNAL (programming language · Simple (philosophy · Stochastic game · Transparency (behavior · Auction Theory and Applications · Computer Science · Experimental Behavioral Economics Studies · Finance · Law · Law, Economics, and Judicial Systems · Mathematics
A Theory of Auctions and Competitive Bidding
What Determines Corporate Transparency?
Optimal contracts and competitive markets with costly state verification
Strategy-proofness and Arrow's conditions
Optimal Auction Design
Manipulation of Voting Schemes
Transparency
Evidence reading mechanisms
On Transparency in Organizations
Implementation with evidence
Partially Verifiable Information and Mechanism Design
Commitment versus Flexibility with Costly Verification
Heimlichkeit und Schriftlichkeit
| Citations per year | 0.33 |
|---|---|
| Citation span | 2023 - 2023 (1) |
| Highly cited | No |