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Contracting with Heterogeneous Researchers

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  • Han Wang

Abstract

We study the design of contracts that incentivize a researcher to conduct a costly experiment, extending the work of Yoder (2022) from binary states to a general state space. The cost is private information of the researcher. When the experiment is observable, we find the optimal contract and show that higher types choose more costly experiments, but not necessarily more Blackwell informative ones. When only the experiment result is observable, the principal can still achieve the same optimal outcome if and only if a certain monotonicity condition with respect to types holds. Our analysis demonstrates that the general case is qualitatively different than the binary one, but that the contracting problem remains tractable.

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  • Han Wang, 2023. "Contracting with Heterogeneous Researchers," Papers 2307.07629, arXiv.org.
    • Handle: RePEc:arx:papers:2307.07629
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    References listed on IDEAS

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    1. Nathan Yoder, 2022. "Designing Incentives for Heterogeneous Researchers," Journal of Political Economy, University of Chicago Press, vol. 130(8), pages 2018-2054.
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    5. Roger B. Myerson, 1981. "Optimal Auction Design," Mathematics of Operations Research, INFORMS, vol. 6(1), pages 58-73, February.
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    7. Robert J. Aumann, 1995. "Repeated Games with Incomplete Information," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262011476, December.
    8. Emir Kamenica, 2019. "Bayesian Persuasion and Information Design," Annual Review of Economics, Annual Reviews, vol. 11(1), pages 249-272, August.
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