search query: @author Cremer, J. / total: 4
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| Author: | Cremer, J. Khalil, F. |
| Title: | Gathering information before signing a contract |
| Journal: | American Economic Review
1992 : JUN, VOL. 82:3, p.566-578 |
| Index terms: | CONTRACTS INFORMATION COMPETITION |
| Language: | eng |
| Abstract: | After being offered a contract, an agent has the possibility to refuse the contract if unfavorable states occur, but it burdens him with an observation cost. A fundamental asymmetry lies in the ability to acquire information. It is shown that there can be a fundamental difference between assuming that there is asymmetry of information and assuming that there is asymetry in the ability to gather information. The principal offers a contract in which the agent has no incentive to observe the state of nature , and its terms are explored. It is shown that the principal finds it profitable to organize competition between several agents. |
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