Theoretical Economics, Volume 19, Number 2 ( 2024)

Theoretical Economics 19 (2024), 917–974

Contracting over persistent information

Wei Zhao, Claudio Mezzetti, Ludovic Renou, Tristan Tomala


We consider a dynamic principal-agent problem, where the sole instrument the principal has to incentivize the agent is the disclosure of information. The principal aims at maximizing the (discounted) number of times the agent chooses the principal's preferred action. We show that there exists an optimal policy, where the principal recommends its most preferred action and discloses information as a reward in the next period, until either this action becomes statically optimal for the agent or the agent perfectly learns the state.

Keywords: Dynamic, contract, information, revelation, disclosure, sender, receiver, persuasion

JEL classification: C73, D82

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