Imperfect evaluation in project screening

Andrei Barbos

Journal of Economics, 2014, vol. 112, issue 1, 46 pages

Abstract: This paper studies a model in which an agent considers proposing a project of unknown quality to an evaluator, who has to decide on whether or not to accept it. Earlier papers considered the case when the evaluation is perfect and showed than higher submission fees increase the expected quality of projects submitted for review by discouraging long-shot submissions. We examine the case of two-sided incomplete information where not only the agent’s, but also the evaluator’s assessment of the project is imperfect. We show that under this specification, an increase in the submission fee may lead to a decrease in the quality of projects that are implemented because of its adverse effects on the evaluator’s acceptance policy. Copyright Springer-Verlag Wien 2014

Keywords: Evaluation; Project screening; Regulatory burden; D02; D82; L50 (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (3)

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Working Paper: Imperfect Evaluation in Project Screening (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:kap:jeczfn:v:112:y:2014:i:1:p:31-46

DOI: 10.1007/s00712-013-0334-8

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