  We consider a principal agent project selection problem with asymmetric
information. There are $N$ projects and the principal must select exactly one
of them. Each project provides some profit to the principal and some payoff to
the agent and these profits and payoffs are the agent's private information. We
consider the principal's problem of finding an optimal mechanism for two
different objectives: maximizing expected profit and maximizing the probability
of choosing the most profitable project. Importantly, we assume partial
verifiability so that the agent cannot report a project to be more profitable
to the principal than it actually is. Under this no-overselling constraint, we
characterize the set of implementable mechanisms. Using this characterization,
we find that in the case of two projects, the optimal mechanism under both
objectives takes the form of a simple cutoff mechanism. The simple structure of
the optimal mechanism also allows us to find evidence in support of the
well-known ally-principle which says that principal delegates more authority to
an agent who shares their preferences.
