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Buying Opinions

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  • Mark Whitmeyer
  • Kun Zhang

Abstract

A principal hires an agent to acquire soft information about an unknown state. Even though neither how the agent learns nor what the agent discovers are contractible, we show the principal is unconstrained as to what information the agent can be induced to acquire and report honestly. When the agent is risk neutral, and a) is not asked to learn too much, b) can acquire information sufficiently cheaply, or c) can face sufficiently large penalties, the principal can attain the first-best outcome. We discuss the effect of risk aversion (on the part of the agent) and characterize the second-best contracts.

Suggested Citation

  • Mark Whitmeyer & Kun Zhang, 2022. "Buying Opinions," Papers 2202.05249, arXiv.org, revised Jul 2023.
    • Handle: RePEc:arx:papers:2202.05249
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    References listed on IDEAS

    as
    1. Luciano Pomatto & Philipp Strack & Omer Tamuz, 2018. "The Cost of Information: The Case of Constant Marginal Costs," Papers 1812.04211, arXiv.org, revised Feb 2023.
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