arXiv subjects

Justus Preusser

Publications and source records attributed to Justus Preusser.

7 recordsLinked to original sources

arXiv2026

Delegated Information Provision

A designer relies on an experimenter to provide information to a decision maker, but the experimenter has incentives to persuade rather than merely transmit information. Anticipating this motive, the designer can restrict the set of admissible experiments, but cannot prevent the experimenter from garbling any admissible experiment. We model this situation as delegation over experiments. The optimal delegation set is obtained by comparing maximally informative experiments among those the experimenter has no incentive to garble. When the experimenter's preferences are $S$-shaped, we characterize these experiments as double censorship. Relative to the full-delegation benchmark, double censorship features an intermediate pooling region, inducing a smaller pooling region for the highest states. We show that the designer strictly benefits from imposing a nontrivial delegation set that constrains persuasion while retaining information provision. Applying our results to recommender systems, we show that privacy constraints can arise endogenously to protect consumers against persuasion.

econ.TH↗

arXiv2025

Tight Samurai Accountant

This note applies tightness (Kattwinkel and Preusser (2025)) to the setting of Border and Sobel (1987, "Samurai Accountant: A Theory of Auditing and Plunder"). Border and Sobel characterize efficient mechanisms and argue that efficiency entails no loss of optimality. We characterize tight mechanisms and argue that tightness entails no loss of optimality. We show that tight mechanisms form a subset of efficient mechanisms. Therefore, tightness refines efficiency without loss of optimality. By characterizing tight mechanisms, one can replicate the insights from Border and Sobel (1987) and Chander and Wilde (1998). A novel insight is how and in which order the principal uses different instruments to provide incentives to different agent types. Further, we describe a procedure for constructing efficient mechanisms in a setting with a continuum of types.

econ.TH↗

arXiv2025

Waiting for Trade in Markets with Aggregate Uncertainty

This paper studies learning in markets with aggregate uncertainty about whether trade is efficient. A long-lived seller offers prices to buyers, who are short-lived and arrive according to a Poisson process. A hidden state determines whether the buyers' common value exceeds the seller's reservation value. All parties observe noisy, private signals about the state. With small intertemporal frictions and when the seller has commitment power, the seller waits for a buyer with the most favorable signal to arrive up to an exit time that depends on the seller's private information. This strategy profile maximizes both the seller's profit and the expected surplus. Without commitment, the commitment profit is unattainable. Instead, there is an equilibrium in which the seller also waits for a buyer with the most favorable signal, but, relative to the commitment case, the seller exits inefficiently late, and the trade probability is inefficiently high.

econ.TH↗

arXiv2025

The Division of Surplus and the Burden of Proof

A principal and an agent divide a surplus whose size is known only to the agent. The agent decides how much to reveal initially. Both parties can acquire costly evidence to verify the surplus. The agent's liability is bounded by the revealed surplus. The principal commits to their own acquisition-effort and to transfers contingent on who provides evidence. With these instruments, the principal simultaneously motivates the agent to reveal the surplus and to acquire evidence. We characterize optimal mechanisms using a novel technique that is based on reforming existing mechanisms and orders the instruments. It applies to related multi-instrument problems.

econ.TH↗

arXiv2024

Designing Scientific Grants

This paper overviews the economics of scientific grants, focusing on the interplay between the inherent uncertainty in research, researchers' incentives, and grant design. Grants differ from traditional market systems and other science and innovation policy tools, such as prizes and patents. We outline the main economic forces specific to science, noting the limited attention given to grant funding in the economics literature. Using tools from information economics, we identify key incentive problems at various stages of the grant funding process and offer guidance for effective grant design. In the allocation stage, funders aim to select the highest-merit applications while minimizing evaluation costs. The selection rule, in turn, impacts researchers' incentives to apply and invest in their proposals. In the grant management stage, funders monitor researchers to ensure efficient use of funds. We discuss the advantages and potential pitfalls of (partial) lotteries and emphasize the effectiveness of staged grant design in promoting a productive use of grants. Beyond these broadly applicable insights, our overview highlights the need for further research on grantmaking. Understudied areas include, at the micro level, the interplay of different grant funding stages, and at the macro level, the interaction of grants with other instruments in the market for science.

econ.GN↗

arXiv2024

Optimal Allocation with Peer Information

We study allocation problems without monetary transfers where agents have correlated types, i.e., hold private information about one another. Such peer information is relevant in various settings, including science funding, allocation of targeted aid, or intra-firm allocation. Incentive compatibility requires that agents cannot improve their own allocation by misrepresenting the merits of allocating to others. We characterize optimal incentive-compatible mechanisms using techniques from the theory of perfect graphs. Optimal mechanisms improve on review panels commonly observed in practice by eliciting information directly from eligible agents and by using allocation lotteries to alleviate incentive constraints. Computational hardness results imply that exactly optimal mechanisms are impractically complex. We propose ranking-based mechanisms as a viable alternative and show that they are approximately optimal when agents are informationally small, i.e., when no single agent has information that is crucial for evaluating a large fraction of the other agents.

econ.TH↗

arXiv2022

Mechanisms without transfers for fully biased agents

A principal must decide between two options. Which one she prefers depends on the private information of two agents. One agent always prefers the first option; the other always prefers the second. Transfers are infeasible. One application of this setting is the efficient division of a fixed budget between two competing departments. We first characterize all implementable mechanisms under arbitrary correlation. Second, we study when there exists a mechanism that yields the principal a higher payoff than she could receive by choosing the ex-ante optimal decision without consulting the agents. In the budget example, such a profitable mechanism exists if and only if the information of one department is also relevant for the expected returns of the other department. We generalize this insight to derive necessary and sufficient conditions for the existence of a profitable mechanism in the n-agent allocation problem with independent types.

econ.TH↗