We study a setting in which an agent receives private information before choosing from a menu and anticipates hindsight scrutiny. Such scrutiny creates a motive for conservatism toward menu expansions. Our key axiom, conservatism, is a direct weakening of preference for flexibility: Adding an option is weakly beneficial whenever it leaves the menu's hindsight benchmark unchanged. Together with standard axioms, conservatism characterizes a scrutiny representation of preferences over menus in which the agent behaves as if she evaluates each menu by subtracting anticipated scrutiny from the material value of informed choice. Menu preference identifies a unique minimum pair of private information and scrutiny intensity, while incorporating subsequent stochastic-choice data pins down the actual pair. Applications to medical liability and corporate innovation illustrate the implications of our model for accountability design.
A principal relies on information held by a biased agent in decision-making. Without a prior over the circumstances that may arise, she designs a delegation rule to minimize the worst-case regret. Optimal delegation combines a default action, a fixed gap above it, and a higher discretionary interval with random boundar...
A sender with commitment provides additional information to an already informed receiver. Final posterior means must be more dispersed than initial means and less dispersed than the state, in convex order. We characterize when these two plausibility constraints are also sufficient, so that every distribution satisfying...
An expert may misreport her forecast to influence a decision she cares about. We study contracts that elicit both her belief about a verifiable state and her stake in a binary action. If every belief is possible at two distinct stakes, exact incentive compatibility prevents a belief-only mechanism from letting the acti...
Many markets are regulated for paternalistic reasons. We develop a mechanism-design framework to derive the optimal policy mix between price regulation and quantity controls. A budget-constrained planner allocates trade between privately informed buyers and sellers while disagreeing with their valuations. When the plan...
Julien Combe, Yves le Yaouanq· CESifo working papers· 0 citations
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