Verifiable and Nonverifiable Information in a Two-Period Agency Problem

摘要: I examine how a firm’s opportunity to verify information influences the joint use of verifiable and unverifiable for incentive contracting. employ simple two-period agency model, in which contract frictions arise from limited liability potential unverifiability principal’s about agent’s action. With short-term contract, principal benefits both more informative conservative verification his private information. long-term contracts, he may prefer less verification, but preference persists.