Negative value of information in an informed principal problem with independent private values
|Speaker:||Tymofiy Mylovanov, University of Bonn|
|Date:||Thursday 1 June 2006|
|Location:||Lecture Room D, Streatham Court|
This note demonstrates that in a principal-agent environment with independent pri- vate values and generic payo®s, the mechanism implemented by an informed principal is not ex-ante optimal. This result implies that in (generic) settings where the principal can covertly acquire private information before selecting a mechanism, she will fail to select an ex-ante optimal mechanism. Furthermore, the principal is indi®erent whether to become informed before or after selecting a mechanism.