Information Acquisition Towards Unanimous Consent

Yingkai Li and Boli Xu

Papers from arXiv.org

Abstract: A manager facing a task of unknown difficulty can propose a plan to let a worker undertake the task; the worker can either accept the proposal or reject it. The plan benefits the worker only when the task is sufficiently easy and benefits the manager only when it is sufficiently hard. The manager can conduct a test at no cost to acquire information about the difficulty of the task; however, she can misreport the test result to the worker. We find that it is optimal for the manager to conduct a threshold test and to propose the plan only when the difficulty of the task exceeds the threshold. Moreover, when the worker privately knows his capability, we find that the manager can benefit from screening the worker by offering up to two additional interval tests.

Date: 2024-05, Revised 2025-03
New Economics Papers: this item is included in nep-gth, nep-mic and nep-ppm
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