Delegation of learning from multiple sources of information

Abstract

A principal delegates a decision to a biased expert. Before taking the decision, the expert may undertake incremental learning about the unknown binary state from two alternative information sources. There are no transfers but the principal retains the right to terminate the expert’s learning to take the decision herself. The right to terminate learning benefits the principal when the preferences of the principal and the expert are sufficiently misaligned but may be detrimental when the preferences are sufficiently closely aligned.