Screening Ethics when Honest Agents Keep their Word

Economic Theory - Tập 30 - Trang 291-311 - 2006
Ingela Alger1, Régis Renault2,3
1Economics Department, Boston College, Chestnut Hill, USA
2THEMA, Université de Cergy-Pontoise, Cergy-Pontoise Cedex, France
3Institut Universitaire de France, Paris, France

Tóm tắt

Using a principal-agent setting, we introduce honesty that requires pre-commitment. The principal offers a menu of mechanisms to screen ethics. Agents may misrepresent ethics. Dishonest agents may misrepresent the match with the assigned task (good or bad), while honest agents reveal the match honestly if they have pre-committed. Ethics-screening, that allows for match-screening with dishonest agents while leaving a lower rent to honest agents, is optimal if both honesty and a good match are likely. Otherwise the optimal mechanism is the standard second-best or the first-best (where dishonest agents misrepresent the match), if dishonesty is likely or unlikely respectively.

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