Screening for breakthroughs

Gregorio Curello and Ludvig Sinander

Papers from arXiv.org

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.

Date: 2020-11, Revised 2023-06
New Economics Papers: this item is included in nep-des, nep-ias, nep-mic and nep-upt
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Persistent link: https://EconPapers.repec.org/RePEc:arx:papers:2011.10090

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