Incentivizing Information Acquisition

Fan Wu

Papers from arXiv.org

Abstract: I study a principal-agent model in which a principal hires an agent to collect information about an unknown continuous state. The agent acquires a signal whose distribution is centered around the state, controlling the signal's precision at a cost. The principal observes neither the precision nor the signal, but rather, using transfers that can depend on the state, incentivizes the agent to choose high precision and report the signal truthfully. I identify a sufficient and necessary condition on the agent's information structure which ensures that there exists an optimal transfer with a simple cutoff structure: the agent receives a fixed prize when his prediction is close enough to the state and receives nothing otherwise. This condition is mild and applies to all signal distributions commonly used in the literature.

Date: 2024-10, Revised 2025-02
New Economics Papers: this item is included in nep-cta and nep-mic
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://arxiv.org/pdf/2410.13978 Latest version (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:arx:papers:2410.13978

Access Statistics for this paper

More papers in Papers from arXiv.org
Bibliographic data for series maintained by arXiv administrators ().