IDEAS home Printed from https://ideas.repec.org/p/arx/papers/2409.19853.html
   My bibliography  Save this paper

Mechanism Design with Endogenous Perception

Author

Listed:
  • Benjamin Balzer
  • Benjamin Young

Abstract

We model endogenous perception of private information in single-agent screening problems, with potential evaluation errors. The agent's evaluation of their type depends on their cognitive state: either attentive (i.e., they correctly perceive their type) or inattentive (i.e., they might misperceive their type). The mechanism's incentives structure determines the agent's cognitive state via costly investment in cognition. We derive a general representation of attention incentives, show how they vary with the mechanism's allocation rule, and define a notion of accuracy of perception. In applications we showcase how perception both shapes and is shaped by the design of mechanisms.

Suggested Citation

  • Benjamin Balzer & Benjamin Young, 2024. "Mechanism Design with Endogenous Perception," Papers 2409.19853, arXiv.org, revised Oct 2024.
    • Handle: RePEc:arx:papers:2409.19853
    as

    Download full text from publisher

    File URL: http://arxiv.org/pdf/2409.19853
    File Function: Latest version
    Download Restriction: no
    ---><---

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:arx:papers:2409.19853. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: arXiv administrators (email available below). General contact details of provider: http://arxiv.org/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.