Incentives for Unaware Agents

@article{Thadden2011IncentivesFU,
  title={Incentives for Unaware Agents},
  author={Ernst-Ludwig von Thadden and X. Zhao},
  journal={Cognitive Social Science eJournal},
  year={2011}
}
The paper introduces the problem of unawareness into Principal-Agent theory and discusses optimal incentive contracts when the agent may be unaware of her action space. Depending on the agent's default behavior, it can be optimal for the principal to propose an incomplete contract (that keeps the agent unaware) or a complete contract. The key tradeoff is that of enlarging the agent's choice set versus adding costly incentive constraints. If agents differ in their unawareness, optimal contracts… Expand
39 Citations
Asymmetric awareness and moral hazard
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  • Economics, Computer Science
  • Games Econ. Behav.
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Framing contingencies in contracts
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  • Economics, Computer Science
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  • 2011
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Moral Hazard: Base Models and Two Extensions
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Solution Concepts of Principal-Agent Models with Unawareness of Actions
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Opportunism and Incomplete Contracts
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Trade and the value of information under unawareness
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  • PDF
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