Benefiting from Bias: Delegating to Encourage Information Acquisition

• Tác giả: Ian Ball, Xin Gao
• Ngôn ngữ: eng
• Ký hiệu phân loại: 025.525 Selective dissemination of information (SDI)
• Thông tin xuất bản: 2023
• Bộ sưu tập: Báo, Tạp chí
• ID: 198443

Tóm tắt

A principal delegates decisions to a biased agent. Payoffs depend on a state that the principal cannot observe. Initially, the agent does not observe the state, but he can acquire information about it at a cost. We characterize the principal's optimal delegation set. This set features a cap on high decisions and a gap around the agent's ex ante favorite decision. It may even induce ex-post Pareto-dominated decisions. Under certain conditions on the cost of information acquisition, we show that the principal prefers delegating to an agent with a small bias than to an unbiased agent.