FRANK ROSAR

Abstract: We consider a setting in which information about an agent's type-the quality of their product or their ability-is important for society. Should information be provided through a mandatory testing (or certification) procedure? And should the procedure be transparent, i.e., should test results become publicly announced? We tackle these questions in the following setting. The accuracy of the test is endogenous, the agent possesses imprecise private information about their quality, and the agent is information-averse whereas the principal is information-loving.

Primary location: Karlsruhe Germany