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arXiv · 2011.10090

Screening for breakthroughs

Gregorio Curello·Ludvig Sinander
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Abstract

How best to incentivise prompt disclosure? We study this question in a general model in which a technological breakthrough occurs at an uncertain time and is privately observed by an agent, and a principal must incentivise disclosure via her control of a payoff-relevant physical allocation. We uncover a deadline structure of optimal mechanisms: they have a simple deadline form in an important special case, and a graduated deadline structure in general. We apply our results to the design of unemployment insurance schemes.

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Gregorio Curello, Ludvig Sinander. 2020-11-19. Screening for breakthroughs. https://doi.org/10.3982/te6247

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