When Should a Principal Delegate to an Agent in Selection Processes?

TMLR Paper8832 Authors

Abstract:

Decision-makers in high-stakes selection processes often face a fundamental choice: whether to make decisions themselves or to delegate authority to another entity whose incentives may only be partially aligned with their own. Such delegation arises naturally in settings like graduate admissions, hiring, or promotion, where a principal (e.g. a professor or manager) either reviews applicants personally and makes decisions or decisions are delegated to an agent (e.g. a committee or third-party or AI agent).

The principal has the expertise to conduct holistic evaluations of applicants (even accounting for factors like team fit), but incurs a cost for every application reviewed. In contrast, the agent can review a large volume of applications efficiently, greatly lowering the principal's costs. However, the agent's evaluation is on the basis of a signal that is only correlated with the principal's metric but may be potentially misaligned, diminishing the expected quality of selected applicants. We study this fundamental trade-off in a stylized selection model with noisy signals.
Our goal is to characterize when delegation is beneficial versus when decision-making should remain with the principal. We compare these regimes along three dimensions: (i) the principal’s utility; (ii) the quality of the selected applicants according to the principal's metric; and (iii) the fairness of selection outcomes under disparate signal qualities.

Submission Type: Long submission (more than 12 pages of main content)

Changes Since Last Submission: NA

Assigned Action Editor: ~Lirong_Xia1

Submission Number: 8832