Munich Personal RePEc Archive

Imperfect Evaluation in Project Screening

Barbos, Andrei (2012): Imperfect Evaluation in Project Screening.

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Abstract

This paper studies a model in which an agent considers proposing a project of unknown quality to an evaluator, who decides whether or not to accept it. First, we show that there exist instances where an agent with a better track record of producing high-quality projects should be subjected to more stringent standards. Second, we show that an increase in the submission fee may lead to a decrease in the quality of projects that are implemented because of its effects on the evaluator's acceptance policy.

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