Limited Capacity In Project Selection: Competition Through Evidence Production

Christopher Cotton and Raphael Boleslavsky
Additional contact information
Raphael Boleslavsky: University of Miami

No 1343, Working Paper from Economics Department, Queen's University

Abstract: An organization must decide which proposals to fund. In evaluating the proposals, the organization may rely on those applying for funding to produce evidence about the merits of their own proposals. We consider the role of a capacity constraint preventing the organization from funding all projects. Agents produce more (Blackwell) informative evidence about the merits of their proposals when there are capacity constraints. In a two agent model, we fully characterize the equilibrium under unlimited and limited capacity. Unless the prior strongly favors accepting both proposals, the funding organization is better off when its capacity is limited.

Keywords: strategic search; evidence production; persuasion; lobbying; all-pay auction; Bayesian persuasion (search for similar items in EconPapers)
JEL-codes: D72 D78 D83 L15 (search for similar items in EconPapers)
Pages: 37 pages
Date: 2015-06
New Economics Papers: this item is included in nep-mic and nep-ppm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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https://www.econ.queensu.ca/sites/econ.queensu.ca/files/qed_wp_1343.pdf First version 2015 (application/pdf)

Related works:
Journal Article: Limited capacity in project selection: competition through evidence production (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:qed:wpaper:1343

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