Delegating Multiple Decisions
نویسنده
چکیده
This paper shows how to extend the heuristic of capping an agent against her bias to delegation problems over multiple decisions. These caps may be exactly optimal when the agent has constant biases, in which case a cap corresponds to a ceiling on the weighted average of actions. In more general settings caps give approximately firstbest payoffs when there are many independent decisions. The geometric logic of a cap translates into economic intuition on how to let agents trade off increases on one action for decreases on other actions. I consider specific applications to political delegation, capital investments, monopoly price regulation, and tariff policy.
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