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David Rodina

Northwestern University, Evanston, Illinois, USA

Author: David Rodina

Abstract: This paper studies the interplay between information and incentives in principal- agent relationships with career concerns, that is when the agent wants to be perceived as of high ability. I derive conditions for when more precise information about performance or more uncertainty about the agent’s ability lead to stronger incentives due to career concerns. A key condition for deriving these comparative statics is how effort changes the informativeness of performance signals regarding ability. An indirect, yet tractable representation of information structures enables a full pure strategy equilibrium analysis without ad-hoc restrictions on the set of information structures. Moreover, I show that more sophisticated information revelation technologies that are implicitly ruled out in the literature overturn commonly held assertions regarding information design and career concerns.

Full Text:  “Information Design and Career Concerns”