Screening for Breakthroughs

Gregorio Curello and Ludvig Sinander

CRC TR 224 Discussion Paper Series from University of Bonn and University of Mannheim, Germany

Abstract: We identify a new dynamic agency problem: that of incentivising the prompt disclosure of productive information. To study it, we introduce a general model in which a technological breakthrough occurs at an uncertain time and is privately observed by an agent, and a principal must incentivise disclosure via her control of a payoff-relevant physical allocation. We uncover a deadline structure of optimal mechanisms: they have a simple deadline form in an important special case, and a graduated deadline structure in general. We apply our results to the design of unemployment insurance schemes.

Keywords: Incentive design; delegation; verifiable evidence (search for similar items in EconPapers)
JEL-codes: D82 D86 (search for similar items in EconPapers)
Pages: 84
Date: 2024-06
New Economics Papers: this item is included in nep-cta, nep-des and nep-mic
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Citations: View citations in EconPapers (1)

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