Hierarchical Experimentation

Chen, Chia-Hui; Ishida, Junichiro

Hierarchical Experimentation

Chen, Chia-Hui; Ishida, Junichiro

Institute of Social and Economic Research Discussion Papers, 2015, 949, 1-33

Number of Access:717（2026-02-18 03:11 Counts）

Identifier to cite or link to this item: https://hdl.handle.net/11094/53874

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Title	Hierarchical Experimentation
Creator	NRID 1000020768238 1000020768238 CreatorName Chen, Chia-Hui
Creator	NRID 1000040324222 1000040324222 ORCID 0000-0002-0674-0216 0000-0002-0674-0216 researchmap permalink read0116302 read0116302 Scopus Author ID 36927932200 36927932200 CreatorName Ishida, Junichiro
Subject	bandit problems
	experimentation
	hierarchy
	role specialization
	war of attrition
	delegation
Abstract	We consider a bandit problem faced by a team of two heterogeneous players. The team is hierarchical in that one (the principal) retains the exclusive right to terminate the project while the other (the agent) focuses strictly on implementing the project assigned to him. As a key departure, we assume that the principal may be privately informed about the project quality. In contrast to the existing literature, the belief in our model is generally non-monotonic: while each failure makes the agent less confident in the project, the uninformed principal drops out gradually over time, which partially restores his confidence. We derive explicit solutions for the agent’s effort and the principal’s exit decisions, which allow us to obtain a full characterization of the equilibrium. We also discuss the role of effort monitoring in this context and suggest a new rationale for delegation.
Publisher	The Institute of Social and Economic Research, Osaka University
Source Title	Institute of Social and Economic Research Discussion Papers
Volume (Issue)	949
Page	1-33
Date of Issued	2015-10
Language	English
Handle URL	https://hdl.handle.net/11094/53874
Relation.references	URI https://www.iser.osaka-u.ac.jp/static/resources/docs/dp/2015/DP0949.pdf
Access Rights	metadata only access
Category	ディスカッション／ワーキング・ペーパー DP/WP
Category	Institute of Social and Economic Research Discussion Papers

Resource Type	technical report
Local Type	DP/WP
DCMI Type	Text
DCTERMS.bibliographicCitation	Institute of Social and Economic Research Discussion Papers. 2015, 949, p. 1-33
DC.title	Hierarchical Experimentation
DC.creator	Chen, Chia-Hui
DC.creator	Ishida, Junichiro
DC.publisher	The Institute of Social and Economic Research, Osaka University
DC.language' scheme='DCTERMS.RFC1766	English
DC.type' scheme='DCTERMS.DCMIType	Text
DCTERMS.issued' scheme='DCTERMS.W3CDTF	2015-10
DC.relation' scheme='DCTERMS.URI	https://www.iser.osaka-u.ac.jp/static/resources/docs/dp/2015/DP0949.pdf
DC.subject	bandit problems
	experimentation
	hierarchy
	role specialization
	war of attrition
	delegation
DCTERMS.abstract	We consider a bandit problem faced by a team of two heterogeneous players. The team is hierarchical in that one (the principal) retains the exclusive right to terminate the project while the other (the agent) focuses strictly on implementing the project assigned to him. As a key departure, we assume that the principal may be privately informed about the project quality. In contrast to the existing literature, the belief in our model is generally non-monotonic: while each failure makes the agent less confident in the project, the uninformed principal drops out gradually over time, which partially restores his confidence. We derive explicit solutions for the agent’s effort and the principal’s exit decisions, which allow us to obtain a full characterization of the equilibrium. We also discuss the role of effort monitoring in this context and suggest a new rationale for delegation.
DC.format	53874
citation_title	Hierarchical Experimentation
citation_author	Chen, Chia-Hui
citation_author	Ishida, Junichiro
citation_publisher	The Institute of Social and Economic Research, Osaka University
citation_language	English
citation_date	2015-10
citation_journal_title	Institute of Social and Economic Research Discussion Papers
citation_volume	949
citation_firstpage	1
citation_lastpage	33
citation_public_url	https://hdl.handle.net/11094/53874
citation_abstract_html_url	https://www.iser.osaka-u.ac.jp/static/resources/docs/dp/2015/DP0949.pdf

Hierarchical Experimentation

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