This paper studies the problem of information revelation in a multi-stage tournament where the agents' effort in each stage gives rise to a stochastic performance signal privately observed by the principal. The principal controls the agents' effort incentive through the use of a feedback policy,...

The paper studies a model of delegated search. The distribution of search revenues is unknown to the principal and has to be elicited from the agent in order to design the optimal search policy. At the same time, the search process is unobservable, requiring search to be self-enforcing. The two...

This paper studies the problem of information revelation in a multi-stage tournament where the agents’ effort in each stage gives rise to a stochastic performance signal privately observed by the principal. The principal controls the agents’ effort incentive through the use of a feedback...

We consider a mechanism design setting in which agents can acquire costly information on their preferences as well as others'. The choice of the mechanism generates informational incentives as it affects what information is acquired before play begins. A mechanism is informationally simple if...

We consider the problem of a principal who wishes to contract with a privately informed agent and is not able to commit to not renegotiating any mechanism. That is, we allow the principal, after observing the outcome of a mechanism to renegotiate the resulting contract without cost by proposing...

Drawing on the proposer-responder game examined by Andreoni, Harbaugh, and Vesterlund (2003), I experimentally test four variations of a principal-agent relationship with fixed pay and real effort. Depending on the treatment, the principal can voluntarily, but at her own expense, (1) only reward...

We re-examine the role of managers in preventing free riding when team inputs are not observable. Holmström (1982) shows that managers are necessary due to the team's lack of static incentives to implement budget-breaking group punishments. We ask whether the team can break its own budget in a...

The paper studies a model of delegated search. The distribution of search revenues is unknown to the principal and has to be elicited from the agent in order to design the optimal search policy. At the same time, the search process is unobservable, requiring search to be self-enforcing. The two...

We show that contracting in agency with voluntary participation may involve incentives for the agent's abstention. Their provision alters the optimality criteria in the principal's decision-making, further distorts the mechanism, and may lead to breakdown of contracting in circumstances where...

This paper proposes "expected informativeness," an ex-ante counterpart of a likelihood ratio, in principal-agent models. The principal has an easy task and a difficult task to delegate. The difficult task requires high ability and high effort. It is the first-best outcome to assign tasks...