Information Acquisition and Institutional Design

Article by Matthew C. Stephenson

Although good information is critical to effective decisionmaking, public agents’ private incentives to invest in gathering information may not align with the social interest in their doing so. This Article considers how legal-institutional design choices affect government decisionmakers’ incentive to invest in information, as well as how to manage the inevitable trade-off between promoting efficient use of information ex post and stimulating efficient acquisition of information ex ante. Using a simple theoretical framework, the Article considers a range of techniques for incentivizing information gathering, with particular attention to the structure of public institutions and public law.