The Silent Treatment

Such attention-seeking imposes an externality on the principal, who can only implement one idea per period and may overlook valuable proposals. Her only means of providing incentives is her rule for selecting among proposals, which must be rational for her to follow. Can she design an idea-selection mechanism that circumvents this problem?

In his theory seminar Kfir Eliaz argues that in repeated interactions, the principal can ensure agents refrain from communicating ideas unless they are of the highest quality.

The principal may achieve her first-best outcome even when she is fully attention constrained and has minimal information about the ability of agents. Whether her first best is achievable hinges on the the worst possible agent.