An agent of unknown expertise is requested to forecast the mean of an uncertain outcome. The agent can refine forecasts at a constant marginal cost per unit precision, but neither cost nor precision can be verified by the planner. The problem is to induce both truthful revelation and an...

It is not unusual for reforming socialist economies to relax wage controls without hardening budget constraints on enterprises or freeing consumer goods prices. This policy can be dangerously destabilizing. While higher wages permit workers to purchase more of some goods, they also tend to...