On Selecting the Right Agent

54 Pages Posted: 25 Feb 2020

See all articles by Geoffroy de Clippel

Geoffroy de Clippel

Brown University - Department of Economics

Kfir Eliaz

Tel Aviv University

Daniel Fershtman

Tel Aviv University

Kareen Rozen

Brown University - Department of Economics

Multiple version iconThere are 2 versions of this paper

Date Written: October 1, 2019

Abstract

Each period, a principal must assign one of two agents to a new task. Profit is stochastically higher when the agent is qualified for the task, but the principal cannot observe qualification. Her only decision is which of the two agents to assign, if any, given the public history of selections and profits, but she cannot commit to any rule. While she maximizes expected discounted profits, each agent maximizes his expected discounted selection probabilities. We fully characterize when the principal’s first best payoff is attainable in equilibrium, and identify a simple, belief-free, strategy profile achieving this first-best whenever feasible. Additionally, we provide a partial characterization of the case with many agents and discuss how our analysis extends to other variations of the game.

Keywords: dynamic allocation, mechanism design without transfers, mechanism design without commitment

Suggested Citation

de Clippel, Geoffrey and Eliaz, Kfir and Fershtman, Daniel and Rozen, Kareen, On Selecting the Right Agent (October 1, 2019). Available at SSRN: https://ssrn.com/abstract=3527088 or http://dx.doi.org/10.2139/ssrn.3527088

Geoffrey De Clippel (Contact Author)

Brown University - Department of Economics ( email )

64 Waterman Street
Providence, RI 02912
United States

Kfir Eliaz

Tel Aviv University ( email )

Ramat Aviv
Tel-Aviv, 6997801
Israel

Daniel Fershtman

Tel Aviv University ( email )

Ramat Aviv
Tel-Aviv, 6997801
Israel

Kareen Rozen

Brown University - Department of Economics ( email )

64 Waterman Street
Providence, RI 02912
United States

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