On Selecting the Right Agent

Salvador Barber‡, Geoffroy de Clippel, Alejandro Neme and Kareen Rozen

No 2020-11, Working Papers from Brown University, Department of Economics

Abstract: Each period, a principal must assign one of two agents to a new task. Profit is stochastically higher when the agent is qualified for the task, but the principal cannot observe qualification. Her only decision is which of the two agents to assign, if any, given the public history of selections and profits, but she cannot commit to any rule. While she maximizes expected discounted profits, each agent maximizes his expected discounted selection probabilities. We fully characterize when the principal's firstbest payoff is attainable in equilibrium, and identify a simple, belief-free, strategy profile achieving this first-best whenever feasible. Additionally, we provide a partial characterization of the case with many agents and discuss how our analysis extends to other variations of the game.

Date: 2020
New Economics Papers: this item is included in nep-des, nep-hrm and nep-mic
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Related works:
Journal Article: On selecting the right agent (2021)
Working Paper: On Selecting the Right Agent (2019)
Working Paper: On Selecting the Right Agent (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:bro:econwp:2020-11

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