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A principal-agent model of sequential testing
2012
Theoretical Economics
This paper analyzes the optimal provision of incentives in a sequential testing context. In every period the agent can acquire costly information that is relevant to the principal's decision. Neither the agent's e ort nor the realizations of his signals are observable. First, we assume that the principal and the agent are symmetrically informed at the time of contracting. We construct the optimal mechanism and show that the agent is indi erent in every period between performing the test and
doi:10.3982/te914
fatcat:vzsd7m5ou5c6jcjf4xs5vov3ne