Moral hazard resolved in communication for S4n-logic: cyclic communication network case

  • Authors:

  • Takashii Matsuhisa

  • Affiliations:

  • Ibaraki National College of Technology, Department of Natural Science, Hitachinaka-shi, Ibaraki, Japan

  • Venue:
  • GAVTASC'11 Proceedings of the 11th WSEAS international conference on Signal processing, computational geometry and artificial vision, and Proceedings of the 11th WSEAS international conference on Systems theory and scientific computation
  • Year:
  • 2011

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Abstract

This paper investigates the role of communication among the principal and agents under uncertainty. We treat the problem: How epistemic conditions of communication will be able to settle a moral hazard in team in the principal-agent model under uncertainty. We shall propose a communication process to resolve the moral hazard in the principal-agent model by communication. We assume that the agents have the knowledge structure induced from a binary relation associated with the multi-modal logic S4n. We show that the moral hazard can be resolved if the principal and each agent communicate their expected marginal costs according to cyclic communication graph.