American Economic Journal: Microeconomics: Vol. 6 No. 3 (August 2014)

Expand

Quick Tools:

Print Article Summary
Export Citation
Sign up for Email Alerts Follow us on Twitter Subscription Information
(Institutional Administrator Access)

Explore:

AEJ: Micro - All Issues

AEJ: Micro Forthcoming Articles

Optimal Project Selection Mechanisms

Article Citation

Bar, Talia, and Sidartha Gordon. 2014. "Optimal Project Selection Mechanisms." American Economic Journal: Microeconomics, 6(3): 227-55.

DOI: 10.1257/mic.6.3.227

Abstract

We 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.

Article Full-Text Access

Full-text Article

Additional Materials

Authors

Bar, Talia (U CT)
Gordon, Sidartha (Sciences Po, Paris)

JEL Classifications

D21: Firm Behavior: Theory
D82: Asymmetric and Private Information; Mechanism Design
O32: Management of Technological Innovation and R&D

Comments

View Comments on This Article (0) | Login to post a comment


American Economic Journal: Microeconomics


Quick Tools:

Sign up for Email Alerts

Follow us on Twitter

Subscription Information
(Institutional Administrator Access)

Explore:

AEJ: Micro - All Issues

AEJ: Micro - Forthcoming Articles

Virtual Field Journals


AEA Member Login:


AEAweb | AEA Journals | Contact Us