Strategic information gathering before a contract is offered

Article Abstract:

An analysis of strategic information gathering before a principal offers a contract reveals that the agent's equilibrium strategy will be mixed with the probability of the agent acquiring information strictly between 0 and 1. The optimal contract the principal will offer an agent may be in the form of a contract where an uninformed agent obtains rent and may be asked to overproduce. It can also be a contract wherein the agent's production schedule is severely distorted, or a contract wherein it may be too costly to separate an informed from an uninformed agent.

Contract Administration, Methods, Management, Econometrics, Contract manufacturing, Information theory, Contract management, Information theory in economics

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Cheap talk in games with incomplete information

Article Abstract:

The addition of pre-play communication has extended the Bayesian games.The Full revelation of private information and the application of the analysis to different examples of Cournot and Bertrand duopolies are provided.

United States, Bayesian statistical decision theory, Bayesian analysis, Economic theory

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