Economic Analysis of Information and Contracts : Essays in Honor of John E. Butterworth

The three coeditors knew John Butterworth for many years and had worked closely with him on a number of research projects. We respected him as a valuable colleague and friend. We were greatly saddened by his untimely death. This book is an attempt to remember him. We dedicate the volume to John with thanks for the contributions he made to our research, to the Faculty of Commerce and Business Administration at the University of British Columbia, and to the accounting profession. This volume contains twelve invited papers on the general topic of the economic theory of information and contracts. We asked leading scholars who had known John to contribute papers. The response was very gratifying. The authors provided us with new strong research papers that should make a lasting contribution to the accounting and information economics research literature, and make us all proud to have put this volume together. The research papers in the volume are in three sections: information evaluation in multi person conte)l:ts; contracting in agencies under moral hazard; and contracting in agencies with private information. We begin part I with Jerry Feltham's review of John Butterworth's pioneering contributions to the accounting and information economics literature. This is followed by an introduction to the papers in the volume and the papers themselves. Front Matter....Pages i-xv Front Matter....Pages 1-1 John E. Butterworth’s Pioneering Contributions to the Accounting and Information Economics Literature....Pages 3-16 Introduction to the Research Papers in This Volume....Pages 17-22 Front Matter....Pages 23-23 Blackwell Informativeness and Sufficient Statistics with Applications to Financial Markets and Multiperson Agencies....Pages 25-93 The Social Value of Public Information in Production Economies....Pages 95-119 Costly Public Information: Optimality and Comparative Statics....Pages 121-139 Value of Information in Bimatrix Games....Pages 141-166 Front Matter....Pages 167-167 The Principal/Agent Problem—Numerical Solutions....Pages 169-196 Explorations in the Theory of Single- and Multiple-Agent Agencies....Pages 197-219 Sequential Choice Under Moral Hazard....Pages 221-245 Risk Sharing and Valuation Under Moral Hazard....Pages 247-268 Front Matter....Pages 269-269 Communication of Private Information in Capital Markets: Contingent Contracts and Verified Reports ....Pages 271-317 Managerial Compensation: Linear-Sharing vs. Bonus-Incentive Plans Under Moral Hazard and Adverse Selection ....Pages 319-347 Intrafirm Resource Allocation and Discretionary Actions....Pages 349-372 Accountants’ Loss Functions and Induced Preferences for Conservatism....Pages 373-408 Back Matter....Pages 409-415