Test Design Under Falsification

S-Tier
Journal: Econometrica
Year: 2022
Volume: 90
Issue: 3
Pages: 1109-1142

Authors (2)

Eduardo Perez‐Richet (not in RePEc) Vasiliki Skreta (University of Texas-Austin)

Score contribution per author:

4.022 = (α=2.01 / 2 authors) × 4.0x S-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

We study the optimal design of tests with manipulable inputs. Tests take a unidimensional state of the world as input and output, an informative signal to guide a receiver's approve or reject decision. The receiver wishes to only approve states that comply with her baseline standard. An agent with a preference for approval can covertly falsify the state of the world at a cost. We characterize receiver‐optimal tests and show they rely on productive falsification by compliant states. They work by setting a more stringent operational standard, and granting noncompliant states a positive approval probability to deter them from falsifying to the standard. We also study how falsification‐detection technologies improve optimal tests. They allow the designer to build an implicit cost of falsification into the test, in the form of signal devaluations. Exploiting this channel requires enriching the signal space.

Technical Details

RePEc Handle
repec:wly:emetrp:v:90:y:2022:i:3:p:1109-1142
Journal Field
General
Author Count
2
Added to Database
2026-01-29