Working paper

Asymmetric information allocation to avoid coordination failure

Fumitoshi Moriya, and Takuro Yamashita

Abstract

In the context of team production, this paper studies the optimal (deterministic and stochastic) information allocation that implements desired effort levels as the unique Bayesian equilibrium. We show that, under certain conditions, it is optimal to asymmetrically inform agents even though they may be ex ante symmetric. The main intuition is that informing the agents asymmetrically can be effective in avoiding "bad" equilibria, that is, equilibria with coordination failure.

Keywords

Moral hazard; Unique implementation; Asymmetric information allocation;

JEL codes

  • D21: Firm Behavior: Theory
  • D23: Organizational Behavior • Transaction Costs • Property Rights
  • D86: Economics of Contract: Theory

Reference

Fumitoshi Moriya, and Takuro Yamashita, Asymmetric information allocation to avoid coordination failure, TSE Working Paper, n. 18-941, July 2018.

See also

Published in

TSE Working Paper, n. 18-941, July 2018