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Capabilities, Competition and Innovation Seminars

Costly Verification and Money Burning

Can Urgan (Princeton University)


Thursday 30 January 2025 13:45 - 15:00

MAR 6.33, 6th floor, The Marshall Building, 44 Lincoln's Inn Fields, London WC2A 3LY

About this event

We consider the problem of a principal aiming to allocate an indivisible, productivity-enhancing resource - e.g., computing equipment, a grant, etc. - to one of many agents. The principal can utilize two instruments previously studied only in isolation but often used together in practice: costly verification and money burning. We identify the optimal allocation protocol, which takes one of two forms. When full separation of types is suboptimal, money burning is not employed, but there is significant pooling. If full separation is optimal, then both instruments are used. Lower types are only subject to money burning. Higher types go through verification and burn money. Notably, money burning is not substituted away.


Participants are expected to adhere to the CEP Events Code of Conduct.


Directions

This event will take place in MAR 6.33, 6th floor, The Marshall Building, 44 Lincoln's Inn Fields, London WC2A 3LY.

The building is labelled MAR on the LSE campus map. You can also find us on Google Maps. For further information, go to contact us.

This series is part of the CEP's Growth programme.