By Joyee Deb, Aditya V. Kuvalekar, Elliot Lipnowski
Theoretical Economics | November 2025
https://doi.org/10.3982/TE5742
Kuvalekar, A., Deb, J., Lipnowski, E. (2025). Fostering collaboration. Theoretical Economics, 20(4), 1181-1211
Theoretical Economics, November 2025
We study project selection and development by a principal, interacting with two agents each of whom wants their respective project selected. When the best choice is uncertain, keeping both projects alive gives the principal the ability to adapt its choice in the future, but implies an efficiency loss of effort being spent on the project finally not chosen. We show a time-varying threshold rule is uniquely optimal: the principal selects the first project to achieve a sufficient lead. The optimum entails initial competition, always followed by permanent collaboration. Our proof uses martingale time-change methods applying weak solutions.
Aditya Kuvalekar is a microeconomist whose primary research area is information economics. His research examines how changes in information environments shape individual and collective behavior, with applications ranging from protests and voting to interactions within organizations. A second strand of his work focuses on market design, including problems of land acquisition from groups and school choice when students have non-standard preferences. His research has been published in leading economics journals, including The American Economic Review, The RAND Journal of Economics, American Economic Journal: Microeconomics, and Journal of Economic Theory.
