30/09/2025 | LECL 60

Nathan Hancart

(university of Oslo)

will give a presentation on 

The Optimal Menu of Tests

Abstract

A decision-maker can test a privately informed agent prior to making a decision. Instead of choosing the test himself, the decision-maker requires the agent to choose the test from a menu. By offering a menu, the decision-maker can use the agent’s choice as an additional source of information. The decision-maker must accept or reject the agent who always wants to be accepted. I show that the decision-maker does not benefit from commitment in this context. Using this result, I show in several economic environments when the decision-maker benefits from offering a choice of tests. When the set of feasible tests contains a most informative test, I provide a necessary and sufficient condition for the introduction of a less informative test in the optimal menu. I also show when the decision-maker benefits from a menu when tests vary in difficulty or types are multi-dimensional.