Contracts with Information Acquisition, via Scoring Rules
Abstract
We consider a principal-agent problem where the agent may privately choose to acquire relevant information prior to taking a hidden action. This model generalizes two special cases: a classic moral hazard setting, and a more recently studied problem of incentivizing information acquisition (IA). We show that all of these problems can be reduced to the design of a proper scoring rule. Under a limited liability condition, we consider the special cases separately and then the general problem. We give novel results for the special case of IA, giving a closed form "pointed polyhedral cone" solution for the general multidimensional problem. We also describe a geometric, scoring-rules based solution to the case of the classic contracts problem. Finally, we give an efficient algorithm for the general problem of Contracts with Information Acquisition.
Keywords
Cite
@article{arxiv.2204.01773,
title = {Contracts with Information Acquisition, via Scoring Rules},
author = {Maneesha Papireddygari and Bo Waggoner},
journal= {arXiv preprint arXiv:2204.01773},
year = {2022}
}