Allocating Resources with Nonmonotonic Returns

• 成果类型: Article
• 署名作者: Baiman, Stanley; Heinle, Mirko S.; Saouma, Richard
• 署名单位: European School of Management & Technology; University of Pennsylvania; Michigan State University; Michigan State University's Broad College of Business
• 刊物名称: MANAGEMENT SCIENCE
• ISSN/ISSBN: 0025-1909
• DOI: 10.1287/mnsc.2019.3513
• 发表日期: 2021
• 页码: 3239-3253
• 关键词: overinvestment; Capital budgeting; resource allocation; information asymmetry; optimal contracting

摘要

The literature on resource allocation under adverse selection has focused on models in which the resource being allocated is such that the privately informed agent always prefers more of it to less. We analyze a firm's optimal resource allocation mechanism when this assumption does not hold and show that the resulting mechanism has a number of novel characteristics. For example, first best may be achievable even with nontrivial information asymmetry; when first best cannot be achieved, it is always optimal to overinvest relative to first best, and the most efficient agent may not earn rents, even when a less efficient agent does.