Contracting with a naive time-inconsistent agent: To exploit or not to exploit?

摘要

In a repeated principal-agent model with moral hazard, in which the agent has beta delta-preferences, we analyze the case where the agent is naive in the sense that he is not fully aware of his inconsistent discounting. We consider the possibility of principal manipulating the naivete of the agent. Surprisingly, when the principal wants to implement the high effort, there are no gains to the principal from the naivete of the agent and the principal does not choose to deceive the agent. The principal's maximum utility is the same from a sophisticated agent and from a naive agent. (C) 2015 Elsevier B.V. All rights reserved.