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Screening for Breakthroughs

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  • Gregorio Curello
  • Ludvig Sinander

Abstract

We identify a new dynamic agency problem: that of incentivising the prompt disclosure of productive information. To study it, we introduce a general model in which a technological breakthrough occurs at an uncertain time and is privately observed by an agent, and a principal must incentivise disclosure via her control of a payoff-relevant physical allocation. We uncover a deadline structure of optimal mechanisms: they have a simple deadline form in an important special case, and a graduated deadline structure in general. We apply our results to the design of unemployment insurance schemes.

Suggested Citation

  • Gregorio Curello & Ludvig Sinander, 2024. "Screening for Breakthroughs," CRC TR 224 Discussion Paper Series crctr224_2024_562, University of Bonn and University of Mannheim, Germany.
    • Handle: RePEc:bon:boncrc:crctr224_2024_562
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    File URL: https://www.crctr224.de/research/discussion-papers/archive/dp562
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    References listed on IDEAS

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    1. Hansen, Gary D & Imrohoroglu, Ayse, 1992. "The Role of Unemployment Insurance in an Economy with Liquidity Constraints and Moral Hazard," Journal of Political Economy, University of Chicago Press, vol. 100(1), pages 118-142, February.
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    More about this item

    Keywords

    Incentive design; delegation; verifiable evidence;
    All these keywords.

    JEL classification:

    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • D86 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Economics of Contract Law

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