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Regret‐Minimizing Project Choice

Econometrica 2023 91(5), 1567-1593
An agent observes the set of available projects and proposes some, but not necessarily all, of them. A principal chooses one or none from the proposed set. We solve for a mechanism that minimizes the principal's worst‐case regret. We compare the single‐project environment in which the agent can propose only one project with the multiproject environment in which he can propose many. In both environments, if the agent proposes one project, it is chosen for sure if the principal's payoff is sufficiently high; otherwise, the probability that it is chosen decreases in the agent's payoff. In the multiproject environment, the agent's payoff from proposing multiple projects equals his maximal payoff from proposing each project alone. The multiproject environment outperforms the single‐project one by providing better fallback options than rejection and by delivering this payoff to the agent more efficiently.

The Interval Structure of Optimal Disclosure

Econometrica 2019 87(2), 653-675
A sender persuades a receiver to accept a project by disclosing information about a payoff‐relevant quality. The receiver has private information about the quality, referred to as his type. We show that the sender‐optimal mechanism takes the form of nested intervals: each type accepts on an interval of qualities and a more optimistic type's interval contains a less optimistic type's interval. This nested‐interval structure offers a simple algorithm to solve for the optimal disclosure and connects our problem to the monopoly screening problem. The mechanism is optimal even if the sender conditions the disclosure mechanism on the receiver's reported type.