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ACIIDS
2010
IEEE

Moral Hazard Resolved by Common-Knowledge in S5n Logic

9 years 3 months ago
Moral Hazard Resolved by Common-Knowledge in S5n Logic
This article investigates the role of common-knowledge in the principal-agent model under asymmetric information. We treat the problem: How the common-knowledge condition will be able to settle a moral hazard problem in the principal-agents model under asymmetric information. We shall propose a solution program for the moral hazard in the principal-agents model under asymmetric information by commonknowledge. Let us start that the agents have the knowledge structure induced from a partition relation associated with the multi-modal logic S5n. In particular we consider the situation that the agents commonly know all decision values of the other agents. Under certain assumptions we shall show the moral hazard can be resolved in the principal-agents model when all the expected marginal costs are common-knowledge among the principal and agents.
Takashi Matsuhisa
Added 10 Jul 2010
Updated 10 Jul 2010
Type Conference
Year 2010
Where ACIIDS
Authors Takashi Matsuhisa
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