Constraining to Motivate
arXiv:2111.00522
The paper shows that limiting the set of actions a career‑concerned agent can choose can restore their incentive to gather costly information, improving decision quality in delegated settings.
Abstract
Effective decision-making often involves a principal delegating authority to better-informed agents. However, when agents'careers depend on how their decisions are perceived, they may avoid acquiring costly information and instead choose politically safe actions. We propose a simple solution: constrained delegation. By restricting the agent's choice set, the principal can reshape the reputational stakes attached to the remaining options and restore incentives to acquire information. The mechanism applies broadly to settings where political or market-based incentives discourage information acquisition and shows how limiting discretion can, counterintuitively, improve decision quality.
Revised version of "The Politics of (No) Compromise: Information Acquisition, Policy Discretion, and Reputation" (arXiv:2111.00522). Same model and core results: constrained delegation restores a career-concerned agent's incentive to acquire information by eliminating the action that serves as the uninformed agent's safe harbor. Retitled "Constraining to Motivate."