On young Turks and yes men: optimal contracting for advice

• 成果类型: Article
• 署名作者: Haefner, Samuel; Taylor, Curtis R.
• 署名单位: Duke University
• 刊物名称: RAND JOURNAL OF ECONOMICS
• ISSN/ISSBN: 0741-6261
• DOI: 10.1111/1756-2171.12400
• 发表日期: 2022
• 页码: 63-94
• 关键词: information; incentives

摘要

We study contracting for advice by an agent about how much a principal should invest in a project. Providing the agent with incentives to perform research endogenously generates incentives for her to misreport the results. For high-cost (low-cost) projects, she wishes to overstate (understate) the magnitude-though not the direction-of her research findings. For high-cost projects, the principal mitigates the concomitant agency rents by committing to ignore extreme (Young-Turk) recommendations, whereas for low-cost projects, he ignores mild (Yes-Man) ones. These results are shown to be robust to several natural extensions of the model.