An agent privately observes a technological breakthrough that expands utility possibilities, and must be incentivised to disclose it. The principal controls the agent's utility over time. Optimal mechanisms keep the agent only just willing to disclose promptly. In an important case, a deadline mechanism is optimal : absent disclosure, the agent enjoys an efficient utility before a deadline, and an inefficiently low utility afterwards. In general, optimal mechanisms feature a (possibly gradual) transition from the former to the latter. Even if monetary transfers are permitted, they may not be used . We apply our results to the design of unemployment insurance schemes.
We identify a new and pervasive dynamic agency problem: that of incentivising the prompt disclosure of productive information. To study it, we introduce a 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 the agent's utility . We uncover a striking 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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An agent privately observes a technological breakthrough that expands utility possibilities, and must be incentivised to disclose it. The principal controls
We identify a new and pervasive dynamic agency problem: that of incentivising the prompt disclosure of productive information. To study it, we introduce a 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
R
over time. Optimal mechanisms keep the agent only just willing to disclose promptly. In an important case, a deadline mechanism is optimal : absent disclosure, the agent enjoys an efficient utility before a deadline, and an inefficiently low utility afterwards. In general, optimal mechanisms feature a (possibly gradual) transition from the former to the latter. Even if monetary transfers are permitted, they may not be used
. We uncover a striking deadline structure of optimal mechanisms: they have a simple deadline form in an important special case, and a graduated deadline structure in general