Type
Working paper
Title
Test Design Under Falsification
In
Sciences Po Economics Discussion Papers
Author(s)
PEREZ Eduardo - Département d'économie (Author)
SKRETA Vasiliki - University of Texas at Austin (Author)
Editor
Paris : Département d'économie de Sciences Po
Collection
Sciences Po Economics Discussion Papers : 2018-13
Keywords
Information Design, Falsification, Tests, Manipulation, Cheating, Persuasion
Abstract
EN
We characterize a receiver-optimal test when manipulations are possible in the form of type falsification. Optimal design exploits the following manipulator trade-off: while falsification may lead to better grades, it devalues their meaning. We show that optimal tests can be derived among falsification-proof ones. Our optimal test has a single ‘failing’ grade, and a continuum of ‘passing’ grades. It makes the manipulator indifferent across all moderate levels of falsification. Good types never fail, but bad types may pass. An optimal test delivers at least half of the full-information value to the receiver. A three-grade optimal test also performs well.

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