Author(s): Suzanne Scotchmer
Year: 2012
Abstract:
We
study the optimal way to select projects or agents in environments where
information arrives in well defined rounds. Examples include academic
environments where review periods are set by policy, aptitude tests such
as those given by software developers to programmers applying for jobs,
venture capital protocols where the rounds of funding may be stopped
before the project is complete, and FDA testing, where drugs can be
dropped at well defined junctures. Sequential rounds of elimination
reduce the cost of selection, but also reduce the average quality of
surviving projects. We characterize the nature of the optimal screening
process with and without “memory.”
Keywords: log supermodularity, rounds of elimination, picking winners, screening
Link: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2120974