Persuading the Principal To Wait ∗

  title={Persuading the Principal To Wait ∗},
  author={Dmitry Orlov and Andrzej Skrzypacz and Pavel Zryumov},
A principal decides when to exercise a real option. A biased agent influences this decision by strategically disclosing relevant information. To persuade the principal to wait it is optimal to commit to delayed disclosure of all information. Without long-term commitment, this promise is credible only if the agent’s bias towards delayed exercise is small; otherwise, the agent pipets information, probabilistically delaying the principal’s action. When the agent is biased towards early exercise… CONTINUE READING

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