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Setting Interim Deadlines to Persuade

Maxim Senkov

CERGE-EI Working Papers from The Center for Economic Research and Graduate Education - Economics Institute, Prague

Abstract: This paper studies the optimal design of self-reporting on the progress of a project by a rent-seeking agent reporting to a principal who is concerned with accomplishing the project before an exogenous deadline. The project has two stages: completing the first stage serves as a milestone and completing the second stage accomplishes the project. I show that if the project is sufficiently promising ex ante, then the agent commits to provide only the good news that the project is accomplished. If the project is not promising enough ex ante, the agent persuades the principal to start the funding by committing to provide not only good news but also the bad news that the milestone of the project has not been reached by an interim deadline.

Keywords: dynamic Bayesian persuasion; informational incentives; interim deadline; multistage project (search for similar items in EconPapers)
JEL-codes: D82 D83 G24 (search for similar items in EconPapers)
Date: 2022-08
New Economics Papers: this item is included in nep-des, nep-gth, nep-mic and nep-ppm
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