Designing Incentives for Heterogeneous Researchers

Autor:	Nathan Yoder
Rok vydání:	2022
Předmět:	Microeconomics Credit rating Economics and Econometrics Comparative statics Computer science Bond media_common.quotation_subject Principal (computer security) Piecewise Adverse selection Quality (business) Information design media_common
Zdroj:	Journal of Political Economy. 130:2018-2054
ISSN:	1537-534X 0022-3808
Popis:	A principal (e.g., a bond issuer) contracts with a researcher of unknown quality (e.g., a credit rating agency) to conduct a costly experiment, either to inform the principal or to persuade a decision maker. This contracting problem has a novel feature that captures the difference between the form of an experiment and the strength of its results: researchers face a problem of information design, rather than optimal effort. Using a novel comparative static for Bayesian persuasion settings, I characterize the optimal contract and show how experimentation is distorted by adverse selection. Moreover, I show that there is no loss from contracting on the experiment’s result rather than the experiment itself. This optimal results-based contract takes the form of reimbursement for contractible costs, at a rate which is lower for stronger results, plus a (piecewise) two-part tariff.
Databáze:	OpenAIRE
Externí odkaz:	https://explore.openaire.eu/search/publication?articleId=doi_dedup___::5f4ae5b2d76f4c3a00a878c16f5d37a2 https://doi.org/10.1086/720072 Zobrazit plný text záznamu Plný text ve formátu PDF