Centre for Development Economics
Department of Economics, Delhi School of Economics


High Powered Incentives and Communication Failure


Ajit Mishra
University of Bath, UK


18th March, 2016 (Friday) at 3:00 PM

Venue : Seminar Room (First Floor)
Department of Economics, Delhi School of Economics

All are cordially invited

We use a donor-provider-agent framework to study the role of provider incentives for the delivery of developmental goods like aid, credit, or technology transfer to the poor. We consider a situation where credible communication by the provider is the key to successful delivery. Our study shows that the use of high-powered incentives can lead to breakdown of communication between providers and agents, leading to undesirable outcomes. Looking at the interplay between incentives and communication in the presence of typical and motivated providers, we find that in certain situations incentivization leads to worse outcomes.

back to seminars…