Abstract
We study a principal-agent model in which the agent is boundedly rational in his ability to understand the principal’s decision rule. The principal wishes to elicit an agent’s true profile so as to determine whether or not to grant him a certain request. The principal designs a questionnaire and commits himself to accepting certain responses. In designing such a questionnaire, the principal takes into account the bounded rationality of the agent and wishes to reduce the success probability of a dishonest agent who is trying to game the system. It is shown that the principal can construct a sufficiently complex questionnaire that will allow him to respond optimally to agents who tell the truth and at the same time to almost eliminate the probability that a dishonest agent will succeed in cheating.
Original language | English (US) |
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Title of host publication | Models Of Bounded Rationality And Mechanism Design |
Publisher | World Scientific Publishing Co. |
Pages | 123-138 |
Number of pages | 16 |
ISBN (Electronic) | 9789813141339 |
DOIs | |
State | Published - Jan 1 2016 |
Keywords
- Bounded rationality
- Persuasion games
- Questionnaires
ASJC Scopus subject areas
- Economics, Econometrics and Finance(all)
- General Business, Management and Accounting