Liability Design with Information Acquisition

with [Bruno Strulovici](https://faculty.wcas.northwestern.edu/~bhs675/) How to guarantee that firms perform due diligence before launching potentially dangerous products? We study the design of liability rules when (i) limited liability prevents firms from internalizing the full damage they may cause, (ii) penalties are paid only if damage occurs, regardless of the product's inherent riskiness, (iii) firms have private information about their products' riskiness before performing due diligence. We show that (i) any liability mechanism can be implemented by a *tariff* that depends only on the evidence acquired by the firm if a damage occurs, not on any initial report by the firm about its private information, (ii) firms that assign a higher prior to product riskiness always perform more due diligence but less than is socially optimal, and (iii) under a simple and intuitive condition, any type-specific launch thresholds can be implemented by a monotonic tariff.

A Taxation Principle with Non-Contractible Events

with [Bruno Strulovici](https://faculty.wcas.northwestern.edu/~bhs675/) In some legal settings it is not possible to contract with an agent ex ante. For example, a criminal process only start after the crime was committed and only if the agent is apprehended. We study a quasilinear single-agent setting with private information and private actions in which the intervention of the designer is only triggered by certain outcomes. We introduce a property of social choice functions, *identifiability*, and show that implementable social choice functions satisfying this property can be implemented with a *tariff*, that is transfers that depend only on the realized outcome.

Delayed Disclosure

with [Ludvig Sinander](http://www.ludvigsinander.net) A principal owns a project, and recruits an agent to learn about its viability. The agent’s participation over time is observable and costly. Learning is private, allowing the agent to delay the (verifiable) disclosure of any discoveries. The principal incentivises the agent by promising a (history-dependent and possibly random) share of any revenue generated. What is the optimal contract?