When do principals independently choose to share the information obtained from their privately informed agents? Information sharing affects contracting within competing organizations and induces agentsʼ strategies to be correlated through the distortions imposed by principals to obtain information. We show that the incentives to share information depend on the nature of upstream externalities between principals and the correlation of agentsʼ information. With small externalities, principals share information when externalities and correlation have opposite signs, and do not share information when externalities and correlation have the same sign. In this second case, principals face a prisonersʼ dilemma since they obtain higher profits by sharing information.

Information Sharing between Vertical Hierarchies / Pagnozzi, Marco; Salvatore, Piccolo. - In: GAMES AND ECONOMIC BEHAVIOR. - ISSN 0899-8256. - 79:May(2013), pp. 201-222.

Information Sharing between Vertical Hierarchies

PAGNOZZI, MARCO;
2013

Abstract

When do principals independently choose to share the information obtained from their privately informed agents? Information sharing affects contracting within competing organizations and induces agentsʼ strategies to be correlated through the distortions imposed by principals to obtain information. We show that the incentives to share information depend on the nature of upstream externalities between principals and the correlation of agentsʼ information. With small externalities, principals share information when externalities and correlation have opposite signs, and do not share information when externalities and correlation have the same sign. In this second case, principals face a prisonersʼ dilemma since they obtain higher profits by sharing information.
2013
Information Sharing between Vertical Hierarchies / Pagnozzi, Marco; Salvatore, Piccolo. - In: GAMES AND ECONOMIC BEHAVIOR. - ISSN 0899-8256. - 79:May(2013), pp. 201-222.
File in questo prodotto:
Non ci sono file associati a questo prodotto.

I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.

Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11588/571310
Citazioni
  • ???jsp.display-item.citation.pmc??? ND
  • Scopus 12
  • ???jsp.display-item.citation.isi??? 12
social impact