Screening for breakthroughs

Ludvig Sinander (University of Oxford - Nuffield College)

October 5, 2021, 11:00–12:30


Room Auditorium 3

Economic Theory Seminar


We identify a new dynamic agency problem: that of incentivising the prompt disclosure of productive information. To study it, we introduce a general model in which a technological breakthrough occurs at an uncertain time and is privately observed by an agent, and a principal must incentivise disclosure via her control of the agent’s utility. We uncover a deadline structure of optimal mechanisms: they have a simple deadline form in an important special case, and a graduated deadline structure in general.We apply our results to the design of unemployment insurance schemes.