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Motivation and information design

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  • Habibi, Amir

Abstract

I model a benevolent planner who motivates a time-inconsistent agent by only committing to provide feedback. The optimal feedback mechanism always takes the simple form of recommending an action. I also provide conditions for when the optimal feedback mechanism takes the simple form of a cutoff. I show that providing incentives through feedback always makes the time-inconsistent agent unambiguously better off, a property that does not necessarily hold when monetary instruments are used.

Suggested Citation

  • Habibi, Amir, 2020. "Motivation and information design," Journal of Economic Behavior & Organization, Elsevier, vol. 169(C), pages 1-18.
    • Handle: RePEc:eee:jeborg:v:169:y:2020:i:c:p:1-18
    DOI: 10.1016/j.jebo.2019.10.015
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    Cited by:

    1. Thomas Mariotti & Nikolaus Schweizer & Nora Szech & Jonas von Wangenheim, 2023. "Information Nudges and Self-Control," Management Science, INFORMS, vol. 69(4), pages 2182-2197, April.
    2. Doval, Laura & Skreta, Vasiliki, 0. "Optimal mechanism for the sale of a durable good," Theoretical Economics, Econometric Society.
    3. Sergio Cappellini, 2022. "Optimal Unemployment Insurance with Worker Profiling," "Marco Fanno" Working Papers 0294, Dipartimento di Scienze Economiche "Marco Fanno".

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    More about this item

    Keywords

    Information design; Moral hazard; Time-inconsistency;
    All these keywords.

    JEL classification:

    • D86 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Economics of Contract Law
    • D90 - Microeconomics - - Micro-Based Behavioral Economics - - - General

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