Disclosure of Status in an Agency Setting
45 Pages Posted: 23 Nov 2011 Last revised: 13 Jun 2014
Date Written: June 2014
We develop a model in which the principal and the agent share private information about the value of the agent for a multi-agent organization. The principal can disclose private information and make public the relative standing or status of all agents in the organization. We study whether it is better in terms of profit and utility to disclose or to not disclose status to the group of agents. Conditions for the optimality of disclosure versus non-disclosure are characterized for the cases of exogenous and endogenous human capital.
Keywords: Status, Disclosure, Human Capital
JEL Classification: D82, D63, L23, M52, M54
Suggested Citation: Suggested Citation