Optimal Project Selection Mechanisms
AbstractWe study mechanisms for selecting up to m out of n projects. Project managers’ private information on quality is elicited through transfers. Under limited liability, the optimal mechanism selects projects that maximize some function of the project’s observable and reported characteristics. When all reported qualities exceed their own project-specific thresholds, the selected set only depends on observable characteristics, not reported qualities. Each threshold is related to (i) the outside option level at which the cost and benefit of eliciting information on the project cancel out and (ii) the optimal value of selecting one among infinitely many ex ante identical projects.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Sciences Po Departement of Economics in its series Sciences Po Economics Discussion Papers with number 2013-08.
Date of creation: Jul 2013
Date of revision:
adverse selection; information acquisition; mechanism design; project selection; limited liability; R&D.;
Other versions of this item:
- D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
- O32 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Management of Technological Innovation and R&D
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-08-05 (All new papers)
- NEP-CTA-2013-08-05 (Contract Theory & Applications)
- NEP-INO-2013-08-05 (Innovation)
- NEP-MIC-2013-08-05 (Microeconomics)
- NEP-PPM-2013-08-05 (Project, Program & Portfolio Management)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Richard A. Lambert, 1986. "Executive Effort and Selection of Risky Projects," RAND Journal of Economics, The RAND Corporation, vol. 17(1), pages 77-88, Spring.
- Che, Yeon-Koo & Gale, Ian, 2000. "The Optimal Mechanism for Selling to a Budget-Constrained Buyer," Journal of Economic Theory, Elsevier, vol. 92(2), pages 198-233, June.
- Alejandro M. Manelli & Daniel R. Vincent, 1992.
"Optimal Procurement Mechanisms,"
999, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- Moore, John, 1985. "Optimal Labour Contracts When Workers Have a Variety of Privately Observed Reservation Wages," Review of Economic Studies, Wiley Blackwell, vol. 52(1), pages 37-67, January.
- Mookherjee, Dilip & Reichelstein, Stefan, 1992. "Dominant strategy implementation of Bayesian incentive compatible allocation rules," Journal of Economic Theory, Elsevier, vol. 56(2), pages 378-399, April.
- Scott Stern, 2004. "Do Scientists Pay to Be Scientists?," Management Science, INFORMS, vol. 50(6), pages 835-853, June.
- Shin, Dongsoo, 2008. "Information acquisition and optimal project management," International Journal of Industrial Organization, Elsevier, vol. 26(4), pages 1032-1043, July.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sciences Po Departement of Economics Series Handler).
If references are entirely missing, you can add them using this form.