Information design with compensation payments

Abstract

This essay analyzes a principal-agent problem with moral hazard where a principal provides additional information and gives incentives for the action choice. The information transmitted by the principal affects the mechanism by which the agent is incentivized to do an action. Based on the information given by the principal to the agent, the latter decides whether or not to obey the information. This dissertation derives illustrative implications by means of a toy model of the interaction between the information structure and the sharing rule offered by the principal.