Diagnostic Feedback under Hidden Task Difficulty

Mark Izgarshev and Georgy Lukyanov ()

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Abstract: An assessment is meant to tell an agent about herself, but its purchase can reveal the task. An evaluator privately observes task difficulty and may publicly purchase an ability diagnostic before effort. With crossing returns across task--ability pairs, adoption and the result jointly shape effort. When high ability is common, difficult tasks are rare, and diagnostic cost is intermediate, an equilibrium refinement uniquely selects diagnosis on the difficult task. Neither type diagnoses when difficulty is public or adoption cannot depend on it. Thus hidden difficulty can produce information about the agent. The mechanism survives continuous effort and imperfect diagnostics.

Date: 2025-08, Revised 2026-07
New Economics Papers: this item is included in nep-cta, nep-gth and nep-mic
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