Effort without Evidence

Georgy Lukyanov

No 26-1785, TSE Working Papers from Toulouse School of Economics (TSE)

Abstract: Success under a demanding method does not show that its additional demands are worthwhile. I study this distinction in a model of intergenerational learning with hidden effort. Moderate effort is informative about the value of a less demanding method; high effort produces more successes but no information about that question. I first characterize efficient experimentation with a complete record. I then show that parents who underweight descendants’ effort costs can induce earlier retirement from experimentation. On an explicit region of priors, a paternalistic equilibrium stops after one failed experiment, whereas an aligned equilibrium allows two. Both transmit the relevant record truthfully and withstand communication deviations: every sender already obtains its preferred full-record continuation. Nevertheless, paternalism lowers discounted material welfare, raises long-run effort and success, and leaves less informative public evidence. Under stronger paternalism, parents may instead conceal knowledge to induce experimentation. I characterize a pooling continuation, establish its local communication stability, and show that it can occur in a full equilibrium. The results distinguish the efficient limits to learning from the additional loss of evidence caused by disagreement over effort costs.

Keywords: experimentation; intergenerational communication; paternalism; effort; social learning (search for similar items in EconPapers)
JEL-codes: C72 C73 D64 D83 (search for similar items in EconPapers)
Date: 2026-10-16
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