Research and the Approval Process: the Organization of Persuasion

Emeric Henry and Marco Ottaviani

Post-Print from HAL

Abstract: An informer sequentially collects and disseminates information through costly research to persuade an evaluator to approve an activity. Payoffs and control rights are split between informer and evaluator depending on the organizational rules governing the approval process. The welfare benchmark corresponds to Wald's classic solution for a statistician with payoff equal to the sum of informer and evaluator. Organizations with different commitment power of informer and evaluator are compared from a positive and normative perspective. Granting authority to the informer is socially optimal when information acquisition is sufficiently costly. The analysis is applied to the regulatory process for drug approval.

Keywords: informer; Payoffs and control rights; evaluator (search for similar items in EconPapers)
Date: 2019-03
References: Add references at CitEc
Citations: View citations in EconPapers (21)

Published in American Economic Review, 2019, 109 (3), pp.911 - 955. ⟨10.1257/aer.20171919⟩

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
Journal Article: Research and the Approval Process: The Organization of Persuasion (2019)
Working Paper: Research and the Approval Process: the Organization of Persuasion (2019)
Working Paper: Research and the Approval Process: The Organization of Persuasion (2017)
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:hal:journl:hal-03391894

DOI: 10.1257/aer.20171919

Access Statistics for this paper

More papers in Post-Print from HAL
Bibliographic data for series maintained by CCSD ().