The Role of Private Benefits in Information Acquisition

Journal of Economic Behavior & Organization, Vol. 68, No. 3-4, December 2008

Posted: 17 May 2010

See all articles by Kazumi Hori

Kazumi Hori

Ritsumeikan University - College of Economics

Date Written: December 2008

Abstract

In many cases, the cost of an agent acquiring information is lower than that for the principal. However, because of a private benefit difference between the principal's and agent's preferences, the principal often cannot fully utilize the agent's advantage. This paper considers the cost of motivating the agent to acquire information and inducing him/her to report it truthfully. As usual, the larger the private benefit, the larger the cost of eliciting true information. At the same time, the private benefit may reduce the cost of motivating information acquisition. Thus, there are cases in which an agent with a different preference is desirable.

JEL Classification: C72, D23, D82, D86

Suggested Citation

Hori, Kazumi, The Role of Private Benefits in Information Acquisition (December 2008). Journal of Economic Behavior & Organization, Vol. 68, No. 3-4, December 2008, Available at SSRN: https://ssrn.com/abstract=1609228

Kazumi Hori (Contact Author)

Ritsumeikan University - College of Economics ( email )

1-1-1 Noji-Higashi
Kusatsu, Shiga 525-8577, Siga 525-8577
Japan

HOME PAGE: http://www.ritsumei.ac.jp/~kazhori/

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