Rewarding successes discourages experimentation

Kimiko Terai, Amihai Glazer

研究成果: Article査読

抄録

Consider a principal who allocates a fixed budget among risk-averse agents. Each agent first chooses a policy or project. After observing the outcomes of their choices, the principal allocates a larger budget to the agents who had adopted the policy with the superior outcome. A subgame perfect Nash equilibrium may have all agents make the same choice, though the principal would prefer that they experiment. If the number of agents is large, or if the principal commits to reducing the aggregate budget when no agent had the superior outcome, or if he commits to avoid funding a riskless policy, different agents can be induced to adopt different policies.

本文言語English
ページ(範囲)361-381
ページ数21
ジャーナルFinanzArchiv
73
4
DOI
出版ステータスPublished - 2017 12

ASJC Scopus subject areas

  • 財務

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