The strategically ignorant principal

The value of the principal's information is studied in a common value principal-agent model. We prove in a general environment that there is a nontrivial set of parameters for which the principal strictly prefers not to be fully informed, regardless of the equilibrium played. Importantly, we do not restrict the principal's offer-space, thereby allowing her to make full strategic use of any information she has. We also show that, among partitional information structures and given certain priors, the principal's optimal information structure groups together states in which her marginal payoffs are similar and separates states in which they diverge.