Information Processing and Limited Liability

S-Tier
Journal: American Economic Review
Year: 2012
Volume: 102
Issue: 3
Pages: 30-34

Score contribution per author:

4.022 = (α=2.01 / 2 authors) × 4.0x S-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

Decision-makers often face limited liability and thus know that their loss will be bounded. We study how limited liability affects the behavior of an agent who chooses how much information to acquire and process in order to take a good decision. We find that an agent facing limited liability processes less information than an agent with unlimited liability. The informational gap between the two agents is larger in bad times than in good times and when information is more costly to process.

Technical Details

RePEc Handle
repec:aea:aecrev:v:102:y:2012:i:3:p:30-34
Journal Field
General
Author Count
2
Added to Database
2026-01-25