Asymmetric Awareness and Heterogeneous Agents

Antoine Dubus (1)

1 Télécom ParisTech

I consider the principal-agent model with asymmetric awareness and introduce heterogeneity of the agents on their aversion to effort. I discuss the optimal contract and market structure in a market with an aware principal and unaware agents. When the principal faces two types of agents, one being more effort-averse than the other, the contract he proposes either pools them, separates them, or excludes the more effort-averse agents of the market depending on their proportion. In a first-best world, all the agents remain unaware. In a second-best one, the principal increases the awareness of the agents, to a level which depends on the nature of the contract.

Mots clés: Economics of Contract: Theory; Unawareness; Asymmetric and Private Information

Domaines: Economies et finances

Antoine Dubus. Asymmetric Awareness and Heterogeneous Agents. 2017. ⟨hal-01521487v1⟩