We study the problem a diagnostic expert (e.g., a physician) faces when offering a diagnosis to a client (e.g., a patient) that may be based only on her own diagnostic ability or supplemented by a diagnostic test — conventional and artificial intelligence (AI) tools alike — revealing the...

We analyze the role of risk limits in the provision of incentives to acquire valuable information for efficient risk management. We study the optimal contract of a trader who (a) must privately exert costly effort in order to collect information and (b) may have access to a costly second opinion...