Symmetric and Asymmetric Information Modeling in Economic Growth

Kamil, Anton Abdulbasah (2007) Symmetric and Asymmetric Information Modeling in Economic Growth. Malaysian Journal of Mathematical Sciences, 1 (2). pp. 163-168. ISSN 1823-8343

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This study presents a model which can be used to improve our understanding of relationships involving asymmetric information. The results show that when there is asymmetric information it is profitable to make some of the salary dependent on the outcome (to give the agent an incentive to work hard). Yet, not all the salary is outcome dependent, since the agent is risk-averse. In short, the optimal contract is the result of a tradeoff between optimal risk-allocation and optimal incentive mechanisms. The effort (and, as a consequence, the

Item Type:Article
Keyword:A principal-agent problem, economic growth, symmetric and asymmetric information
Faculty or Institute:Institute for Mathematical Research
Publisher:UPM Press
ID Code:12565
Deposited By: Najwani Amir Sariffudin
Deposited On:03 Jun 2011 07:30
Last Modified:27 May 2013 07:52

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