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Stefani, Gianluca. "Economic aspects of information in environmental economics." Thesis, University of York, 2007. http://ethos.bl.uk/OrderDetails.do?uin=uk.bl.ethos.489205.
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Information may resolve uncertainty and uncertainty is pervasive. Thus, seeking, producing and trading of information are common economic activities. This is also true in the economics of the environment and for the different stakeholders therein involved. The central aim of this research is to investigate some theoretical aspects of the value and effects of information in environmental economics. Information is valuable either as a decision aid in contexts where either health and environmental characteristics of goods are uncertain or as the object of direct valuation under different provision rules. In a choice context three questions arise providing grounds for empirical investigations.
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Noll, Robbie van der. "Essays on internet and information economics = Essays over internet en informatie economie /." [Amsterdam] : Thela Thesis, 2007. http://aleph.unisg.ch/hsgscan/hm00193054.pdf.
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Nygren, Kjell. "Information-revelation in incomplete-information games /." Connect to resource, 1999. http://rave.ohiolink.edu/etdc/view.cgi?acc%5Fnum=osu1261398706.
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Martineau, Charles. "Essays in information economics." Thesis, University of British Columbia, 2017. http://hdl.handle.net/2429/62191.
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I present three essays on Information Economics. The first essay consists of analyzing high-frequency price dynamics around earnings announcements for the largest 1,500 U.S. stocks between 2011 and 2015. Price discovery following earnings surprises mostly occurs in the after-hours market, following the earnings announcement, and is generally complete by 10 a.m. Eighty percent of the price response to earnings surprises in the after-hours market occurs upon arrival of the first trades. Price reactions are largely explained by earnings surprises and not by order flow, consistent with the theoretical view that news can incorporate prices instantly.
In the second essay, co-authored with Oliver Boguth and Vincent Grégoire, we show that in an effort to increase transparency, the Chair of the Federal Reserve now holds a press conference following some, but not all, Federal Open Market Committee announcements. Press conferences are scheduled independently of economic conditions and communicate little information. Evidence from financial markets demonstrates that investors lower their expectations of important decisions on days without press conferences, and we show that they shift attention away from these announcements. Both channels prevent effective monetary policy, as the committee is averse to surprising markets and aims to coordinate market expectations. Correspondingly, we show that announcements without press conferences convey less price-relevant information. In the third essay, co-authored with Adlai J. Fisher and Jinfei Sheng, we construct indices of media attention to macroeconomic risks including employment, growth, inflation and monetary policy. Attention rises around macroeconomic announcements and following changes in fundamentals over quarterly, annual, and business cycle horizons. The effect is asymmetric, with bad news raising attention more than good news. Increases in aggregate trade volume and volatility coincide with rising attention, controlling for announcements. Finally, changes in attention prior to the unemployment announcement predict both the announcement surprise and stock returns on the announcement day. We conclude that media attention to macroeconomic fundamentals provides useful information beyond the dates and contents of macroeconomic announcements.Business, Sauder School of
Finance, Division of
Graduate
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Yoon, Yeochang. "Essays on Information Economics." The Ohio State University, 2016. http://rave.ohiolink.edu/etdc/view?acc_num=osu1460549265.
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Jeong, Daeyoung. "Essays in Information Economics." The Ohio State University, 2016. http://rave.ohiolink.edu/etdc/view?acc_num=osu1460984045.
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Redlicki, Bartosz Andrzej. "Essays in information economics." Thesis, University of Cambridge, 2018. https://www.repository.cam.ac.uk/handle/1810/277513.
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This thesis consists of three essays in the field of information economics. The first essay studies manipulation of information by partisan media. The recent increase in partisan media has generated interest in what drives media outlets to become more partisan. I develop a model to study the role of diffusion of information by word of mouth. In the model, a media outlet designs an information policy, which specifies the level of partisan slant in the outlet’s news reports. The news spread via a communication chain in a population of agents with heterogeneous preferences. The slant has an impact on whether the agents find the news credible and on their incentives to pass the news to others. The analysis elucidates how partisanship of media can be driven by political polarisation of the public and by the tendency of people to interact with people with similar political views. The second essay, co-authored by Jakub Redlicki, investigates falsification of scientific evidence by interest groups. We analyse a game between a biased sender (an interest group) and a decision maker (a policy maker) where the former can falsify scientific evidence at a cost. The sender observes scientific evidence and knows that it will also be observed by the decision maker unless he falsifies it. If he falsifies, then there is a chance that the decision maker observes the falsified evidence rather than the true scientific evidence. First, we investigate the decision maker’s incentives to privately acquire independent evidence, which not only provides additional information to her but can also strengthen or weaken the sender’s falsification effort. Second, we analyse the decision maker’s incentives to acquire information from the sender. The third essay analyses competition between interest groups for access to a policy maker. I study a model of lobbying in which two privately-informed experts (e.g., interest groups) with opposite goals compete for the opportunity to communicate with a policy maker. The main objective is to analyse the benefits which competition for access brings to the policy maker as opposed to hiring an expert in advance. I show that competition for access is advantageous in that it provides the policy maker with some information about the expert who did not gain access and gives the experts an incentive to invest in their communication skills. On the other hand, hiring an expert in advance allows the policy maker to use a monetary reward to incentivise the expert to invest more in his communication skills.
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Wangenheim, Jonas von. "Essays in Information Economics." Doctoral thesis, Humboldt-Universität zu Berlin, 2018. http://dx.doi.org/10.18452/19349.
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Diese Dissertation besteht aus drei unabhängigen Artikeln in dem Forschungsfeld der Informationsökonomik. Ein wiederkehrendes Motiv in allen drei Artikeln ist die ambivalente Rolle von privater Information. In Kontrast zur klassischen Entscheidungstheorie, in der mehr Informationen Individuen niemals schlechter stellt, analysiere ich drei verschiedene Umgebungen, in denen mehr Konsumenteninformation die Konsumentenrente verringern kann.This dissertation comprises three independent chapters in the field of information economics. The recurrent theme of all three chapters is the ambiguous role of information: While in standard decision theory additional information enables individuals to weakly increase utility through making better choices, I analyze three di erent environments in which more information to consumers may actually be detrimental to consumer utility.
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Glynia, Nektaria Spyridoula <1993>. "Essays on Information Economics." Doctoral thesis, Alma Mater Studiorum - Università di Bologna, 2022. http://amsdottorato.unibo.it/8280/3/PhD_Thesis_Glynia2022.pdf.
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This thesis consists of three essays on information economics. I explore how information is strategically communicated or designed by senders who aim to influence the decisions of a receiver. In the first chapter, I study a cheap talk game between two imperfectly informed experts and a decision maker. The experts receive noisy signals about the state and sequentially communicate the relevant information to the decision maker. I refine the self-serving belief system under uncertainty and Ι characterise the most informative equilibrium that might arise in such environments.In the second chapter, I consider the case where a decision maker seeks advice from a biased expert who cares also about establishing a reputation of being competent. The expert has the incentives to misreport her information but she faces a trade-off between the gain from misrepresentation and the potential reputation loss. I show that the equilibrium is fully-revealing if the expert is not too biased and not too highly reputable. If there is competition between two experts the information transmission is always improved. However, in cases where the experts are more than two the result is ambiguous, and it depends on the players’ prior belief over states.In the last chapter, I consider a model of strategic communication where a privately and imperfectly informed sender can persuade a receiver. The sender may receive favorable or unfavorable private information about her preferred state. I describe two ways that are adopted in real life situations and theoretically improve equilibrium informativeness given sender's private information. First, a policy that suggests symmetry constraints to the experiments' choice. Second, an approval strategy characterised by a low precision threshold where the receiver will accept the sender with a positive probability and a higher one where the sender will be accepted with certainty.
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KARAKOC, PALMINTERI GULEN. "ESSAYS ON INFORMATION ECONOMICS." Doctoral thesis, Università degli Studi di Milano-Bicocca, 2018. http://hdl.handle.net/10281/198954.
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Questa tesi esplora il ruolo delle informazioni private in diversi scenari nella letteratura di economia dell'informazione. Il primo capitolo considera un ambiente di contrattazione verticale dinamico in cui un produttore si occupa di un rivenditore esclusivo per due periodi. Nel modello, un produttore progetta un contratto a lungo termine con un rivenditore che è informato privatamente della domanda e affronta la concorrenza da un concorrente integrato in futuro. I nostri risultati mostrano che la trasparenza con un operatore integrato danneggia i consumatori. Quando il concorrente non è un'impresa integrata, allora è il grado di persistenza della domanda a determinare se la transparenza avvantaggia, o meno, i consumatori. Il secondo capitolo affronta un semplice problema di progettazione dei meccanismi che descrive il comportamento ottimale di un paese preso di mira da un gruppo terroristico straniero. Il paese è incerto sulla forza dei terroristi e potrebbe decidere di acquisire tali informazioni dalla comunità che ospita i terroristi. Evidenziamo un nuovo compromesso tra il rafforzamento del target e le misure militari preventive volte a sradicare il problema alla radice. In contrasto con la letteratura esistente, i nostri risultati mostrano che è ottimale per il paese acquisire informazioni solo quando queste norme sono sufficientemente forti e quando le sue precedenti informazioni sulla forza dei terroristi sono sufficientemente scarse. L'ultimo capitolo analizza un modello di cheap talk in cui un decisore disinformato cerca consigli da uno o due esperti parzialmente informati i cui pregiudizi sono sconosciuti al decisore. Il nostro risultato suggerisce che chi prende le decisioni può trarre beneficio consultando un singolo esperto piuttosto che due esperti con pregiudizi sconosciuti. Questo risultato suggerisce che ottenere un secondo parere potrebbe non essere sempre utile per il processo decisionale.This dissertation explores the role of private information under different scenarios in the literature of information economics. The first chapter considers a dynamic vertical contracting environment in which a manufacturer deals with an exclusive retailer for two periods. In the model, a manufacturer designs a long-term contract with a retailer who is privately informed about demand and faces competition by an integrated entrant in the future. Contrary to what intuition suggests, our results show that transparency with an integrated entrant harms consumers. When the entrant is not an integrated firm, whether transparency benefits consumers depends on the degree of demand persistency. The second chapter deals with a simple mechanism design problem that describes the optimal behavior of a country targeted by a foreign terrorist group. The country is uncertain about the terrorists' strength and may decide to acquire such information from the community hosting the terrorists. We highlight a novel trade-off between target hardening and preemptive military measures aimed at eradicating the problem at its root. In contrast with the existing literature, our results show that it is optimal for the country to acquire information only when these norms are strong enough and when its prior information about the terrorists' strength is sufficiently poor. The last chapter analyzes the effect of uncertain biases on strategic information transmission. We consider a simple cheap talk model in which an uninformed decision maker seeks advice from one or two partially informed experts whose biases are unknown to the decision maker. We show that the decision maker may benefit from consulting a single expert rather than two experts with unknown biases. This result suggests that getting second opinion may not be always helpful for decision making.
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Migrow, Dimitri. "Essays on economics of information." Thesis, University of Warwick, 2015. http://wrap.warwick.ac.uk/80145/.
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This thesis consists of three chapters. In the first two chapters I study the optimal design of communication hierarchies between an uninformed decision maker and privately informed experts who have different preferences over decision maker's action. The motivation for the model described in the first two chapters comes from the fact that in organizations, a central problem is that much of the information relevant for decision making is dispersed among employees who are biased and may lack the incentives to communicate their information to the management. This paper studies how a manager can elicit employees' information by designing a hierarchical communication network. The manager decides who communicates with whom, and in which order, where communication takes the form of cheap talk (Crawford and Sobel, 1982). I show that the optimal network is shaped by two competing forces: an intermediation force that calls for grouping employees together and an uncertainty force that favours separating them. The manager optimally divides employees into groups of similar bias. Under simple conditions, the optimal network features a single intermediary who communicates directly to the manager. Third chapter is work in progress. Here, I study a situation in which a DM can commit to both communication networks and to the delegation of decision rights but not to transfers or arbitrary decision rules based on received information. I show a novel trade-off between centralization and decentralization with two experts and a decision maker, when experts receive noisy and complementary evidence. There is a single decision to be made, the decision maker can allocate the decision right to any of the experts, and can commit to communication channels betwent the players. I study conditions under which delegation combined with decentralized communication outperforms centralization. This happens because delegation encourages information sharing between the experts. Two conditions have to be satisfied in order for a decision maker to benefit from decentralization. First, the expert who decides over policy has to be not too biased towards the decision maker. Second, he should have a smaller distance to the bias of the other expert compared to the DM. In this case, the other expert is willing to reveal more information to the first expert compared to the centralized case.
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Amberger, Korie. "Sectoral Reallocation and Information Economics." The Ohio State University, 2015. http://rave.ohiolink.edu/etdc/view?acc_num=osu1429615391.
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Shin, Dongsoo. "Essays in economics of information /." Thesis, Connect to this title online; UW restricted, 2001. http://hdl.handle.net/1773/7462.
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Su, Tong. "Three Chapters in Information Economics." Thesis, Toulouse 1, 2016. http://www.theses.fr/2016TOU10065/document.
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Ma thèse étudie le mécanisme de l’acquisition et de l’approvisionnement des informations. Il est appliqué à trois situations. Le premier chapitre (travaillé avec Georgy Lukyanov) développe un modèle dans lequel l’émetteur communique stratégiquement avec un groupe de récepteurs. Les gains des récepteurs dépendent des informations de l’émetteur. Ceci indique que, en dépit de la bienveillance de l’émetteur, le conflit des intérêts entre l’émetteur et les récepteurs apparaît de façon endogène à la présence de friction de la coordination. Par conséquent, l’équilibre de communication est imparfait : les nouvelles extrêmes, bonnes ou mauvaises, sont relevées mais les nouvelles relativement neutres ne sont pas prises en compte. Donc, un biais exogène dans les préférences de l’émetteur peut améliorer la communication et augmenter le bien-être. Le second chapitre (travaillé avec Takuro Yamashita) parle du problème de la divulgation optimale des informations dans le mécanisme désigné où le principal peut s’engager dans sa divulgation et aussi dans son mécanisme. Au début, on offre un résultat caractéristique pour optimiser la politique de révélation complète. Pour appliquer le résultat, on montre que le principal (vendeur) préfère toujours révéler toutes les informations relatives aux récepteurs de la vente aux enchères générale. Dans le cas du commerce bilatéral où son but est le surplus avec une légère condition sur l’environnement, il ne trouve pas optimal de révéler toutes les informations. Pour une procédure de vote, les votants peuvent choisir entre le statu quo et la réforme. On démontre que le principal doit révéler toutes les informations sur le bénéfice global mais qu’il ne doit révéler aucune information sur le bénéfice individuel de chaque agent. Dans le troisième chapitre on montre que, contrairement à l’idée conventionnelle selon laquelle les agents qui ont des convictions hétérogènes vont s’entendre à long terme (suite aux nouvelles informations), leurs convictions peuvent diverger s’ils sont rationnellement inattentifs. Quand l’attention a un coût, le choix optimal des agents est d’accepter les nouvelles informations qui leur paraissent plus vraisemblables. Cela va conduire à un apprentissage conformiste. Ainsi, les agents qui ont des croyances éloignées de la vérité réagiront moins que les agents qui ont des croyances proches de la vérité. Ceci va mener à une divergence de leurs anticipations. Je caractérise la condition de la divergence de croyance et je montre que ça a plus de chance d’arriver quand la vérité est plus extrême et que le coût de l’attention est moins importantMy thesis studies the mechanism of endogenous information acquisition and provision, and applies it into three applications. The first chapter (joint with Georgy Lukyanov) develops a model in which the sender strategically communicates with a group of receivers whose payoffs depend on the sender’s information. It is shown that, in the presence of coordination frictions, conflict of interests between the sender and the receivers arises endogenously, in spite of the sender’s benevolence. As a result, equilibrium communication is imperfect: extremely good or bad news get disclosed, while relatively “neutral” information is withheld. Consequently, an exogenous bias in the sender’s preferences can improve communication and raise welfare. The second chapter (joint with Takuro Yamashita) considers the problem of optimal information disclosure in mechanism design where the principal can commit to his disclosure policy as well as to his mechanism. We first provide a characterization result for the optimality of the full disclosure policy. Applying this result, in a generalized auction setting we show that the principal (seller) always prefers to disclose all the relevant information to the agents. In a bilateral trade setting where his objective is surplus, under a mild condition on the environment, he does not find optimal to reveal all the information. In a voting application where voters choose between either the status quo or a reform, we show that the principal should reveal all information regarding to the aggregate benefit from the reform but reveal no information about individual benefit for each agent. The third chapter shows that, in contrast to conventional idea that agents with heterogenous beliefs will agree in the long-term as they learn from new information, their beliefs may diverge if agents’ learning is rationally inattentive. When attention is costly, agents optimally choose to acquire potentially new information which they believe most likely to come, leading to a conformism learning. Hence, agents whose initial beliefs are far from the truth will react less often compared to agents whose beliefs are closer to the truth, leading to a divergence in agents’ beliefs in expectation. I characterize the condition for belief divergence and show that it is more likely to happen when the truth is more extreme and the attention cost is moderate
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Manning, A. "Profitable private information in a capitalist economy." Thesis, University of Oxford, 1985. http://ethos.bl.uk/OrderDetails.do?uin=uk.bl.ethos.371684.
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Shi, Yan Biglaiser Gary. "Essays on applications of information economics." Chapel Hill, N.C. : University of North Carolina at Chapel Hill, 2007. http://dc.lib.unc.edu/u?/etd,1184.
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Thesis (Ph. D.)--University of North Carolina at Chapel Hill, 2007.Title from electronic title page (viewed Mar. 27, 2008). "... in partial fulfillment of the requirements for the degree of Doctor of Philosophy in the Department of Economics." Discipline: Economics; Department/School: Economics.
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Yea, Sangjun. "Essays in Information Economics and Bargaining." The Ohio State University, 2019. http://rave.ohiolink.edu/etdc/view?acc_num=osu1555650435996658.
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Nakamura, Tomoya. "Essays on economics of information disclosure." Kyoto University, 2011. http://hdl.handle.net/2433/142154.
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August, Terrence William. "Essays on economics of information technology /." May be available electronically:, 2007. http://proquest.umi.com/login?COPT=REJTPTU1MTUmSU5UPTAmVkVSPTI=&clientId=12498.
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Bridet, Luc. "Essays on the Economics of Information." Thesis, Toulouse 1, 2016. http://www.theses.fr/2016TOU10063.
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Le chapitre 1 étudie les efforts de persuasion d’un receveur par une partie informée et montre que l’équilibre est caractérisé par un excès de dépenses de persuasion et un délai excessif avant la prise de décision. Un régulateur, même non informé, peut mettre en place une taxation pigouvienne pour améliorer l’efficacité du processus de persuasion sans pour autant compromettre la qualité de la décision finale. Le chapitre 2, co-écrit avec Margaret Leighton, étudie empiriquement le processus de spécialisation des étudiants américains à l’aide de la base de données Baccalaureate and Beyond. En utilisant les résultats semestriels, nous construisons une mesure individuelle de la date de spécialisation. Recoupée avec les observations de carrières professionnelles, cette observation nous permet d’estimer structurellement le degré de transférabilité des compétences, les coûts de réorientation professionnelle et particulièrement le bénéfice informationnel lie à l’option de retarder la spécialisation. Les paramètres estimés indiquent qu’une politique non-anticipée de spécialisation forcée en première année aurait un coût comparable à une baisse de revenus de 1.5%. Le chapitre 3, co-écrit avec Peter Schwardmann, étudie l’interaction entre le marché des prêts aux entrepreneurs et la propension de ces derniers à évaluer leurs projets de façon objective. Nous montrons qu’en présence de frictions informationnelles, les entrepreneurs marqués par une tendance comportementale à surestimer la qualité de leurs projets bénéficient de leurs préférences non-standard, a l’oppose des mécanismes activés par la concurrence de type néoclassique. Nous montrons également que les croyances des entrepreneurs sont soumises à un certain type de discipline : tant que la part relative des aspirations dans l’utilité des agents reste limitée, les contrats offerts à l’équilibre du marché des prêts donnent aux entrepreneurs une incitation à percevoir de façon réaliste leurs chances de succèsChapter 1 models persuasion by an informed party and show that laissez-faire leads to excessive persuasion expenditures and delays decisions. An uninformed regulator can use pigouvian taxation to reduce the delay in decision-making and the amount of persuasion expenditures incurred by advocates, with no corresponding decrease in the quality of decisions eventually taken. Chapter 2, joint with Margaret Leighton, is an empirical study of individual learning and specialisation decision by American college students. We use detailed transcript information in the Baccalaureate and Beyond dataset to construct and explain the timing of specialisation decided by each student. By relating its cross-sectional variation to later job market outcomes, we quantify skill transferability, the cost of career changes and most importantly, the informational benefits of a delayed specialisation. We then use these structural estimates to compare the current college system to one which imposes specialization at college entry. Overall, expected earnings fall by 1.5%. Chapter 3, joint with Peter Schwardmann, studies how the marketplace for financial loans interacts with entrepreneurs' cognition. We show that in a market for project financing dominated by informational frictions, market outcomes reward a particular behavioural deviation from standard preferences: a tendency towards optimistic self-deception. This result stands in stark contrast to those obtained under neoclassical competition. We also show that entrepreneurs' beliefs are subject to some market discipline: as long as anticipatory concerns are limited, entrepreneurs are induced to appraise their projects realistically
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Kim, Sun Hyung. "Essays in labor and information economics." Diss., University of Iowa, 2019. https://ir.uiowa.edu/etd/6973.
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This dissertation contributes to theoretical and empirical studies in microeconomics, with a focus on evaluating policy relevant problems to provide new insights into questions. Within labor economics, I strive to understand the labor market returns to skills, taking into consideration the business cycle. In the first chapter, I investigate how the labor market returns to cognitive skills and social skills vary during recessions. In the second chapter, I examine the short-, medium and long-term career outcomes of college graduates as a function of economic conditions at graduation and both cognitive and social skills. In the third chapter, within information economics, I study how asymmetric information and demand uncertainty influence pricing strategies through learning.
In Chapter 1, I examine how labor market returns to cognitive skills and social skills vary with the business cycle over the past 20 years, using data from the NLSY79 and the NLSY97. Exploiting a comparable set of cognitive and social skill measures across survey waves, I show that an increase in the unemployment rate led to higher demand for cognitive skills in the 2000s. High unemployment also sorted more workers into information use intensive occupations that require computer skills in the 2000s, but it sorted more workers into routine occupations in the 1980s and 1990s. This evidence suggests that recessions accelerate the restructuring of production toward routine-biased technologies. I also find that the returns to social skills increase during periods of high unemployment, though only in terms of the likelihood of full-time employment for experienced workers. Furthermore, an increase in unemployment increases the social skill task intensity of a worker's occupation in the 2000s, while it shows the contrary in the 1980s and 1990s. Based on these results, I argue that routine-biased technological change may not readily substitute for workers in tasks requiring interpersonal interaction, and therefore such technologies demand experienced laborers who have high social skills during recessions.
In Chapter 2, I study the impacts of entry conditions on labor market outcomes to cognitive and social skills for the US college graduating classes of 1979–1989. Using the National Longitudinal Survey of Youth 1979, I find that Workers with higher cognitive skills are more likely to be employed, find job more quickly and have higher-quality employment, while those with higher social skills voluntarily switch jobs more often. I also show that graduating in a worse economy intensifies the roles of social skills, allowing workers with higher social skills to catch up more quickly from poor initial conditions by switching jobs more often. This could partly explain why wage returns to cognitive skills declines but wage returns to social skills increases from graduating in recessions.
In Chapter 3, we consider a dynamic pricing problem facing a seller who has private information about the quality of her good, but is uncertain about the arrival rate of buyers. Restricting attention to the equilibria in which the high-quality seller insists on a constant price, we show that the low-quality seller's expected payoff and equilibrium pricing strategy crucially depend on buyers' knowledge about the demand state. If they are also uncertain about the demand state, then demand uncertainty increases the low-quality seller's expected payoff, and her optimal pricing strategy is to offer a high price initially and drop it to a low price later. If buyers know the demand state, then demand uncertainty does not affect the low-quality seller's expected payoff, and a simple cutoff pricing strategy cannot be a part of equilibrium. In the latter case, we show that there exists an equilibrium in which the low-quality seller begins with a low price, switches up to a high price, and eventually reverts back to the low price.
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Lorgen, Snorre. "On the relationship between information and environmental regulation." Thesis, University of Oxford, 1997. http://ethos.bl.uk/OrderDetails.do?uin=uk.bl.ethos.390357.
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Hahn, Jong-Hee. "Economic issues in the information and network industries." Thesis, University of Oxford, 2000. http://ethos.bl.uk/OrderDetails.do?uin=uk.bl.ethos.326834.
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Aleem, I. "Information, uncertainty and rural credit markets in Pakistan." Thesis, University of Oxford, 1985. http://ethos.bl.uk/OrderDetails.do?uin=uk.bl.ethos.482927.
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Hebert, Benjamin. "Essays on Information and Debt." Thesis, Harvard University, 2015. http://nrs.harvard.edu/urn-3:HUL.InstRepos:17467323.
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These essays attempt to explain why debt contracts are so common, and to explore the consequences resulting from the use of debt contracts. In the first essay, “Moral Hazard and the Optimality of Debt,” I use tools from information theory to study a novel form of moral hazard, and show that debt contracts are the optimal security design in this setting. In the second essay, “Generalized Rational Inattention,” written with Michael Woodford, we develop a generalized version of rational inattention, based on an axiomatic characterization, using the same theorems employed in the first essay. In the third essay, “The Costs of Sovereign Default: Evidence from Argentina,” written with Jesse Schreger, we estimate the costs that Argentina’s 2014 sovereign default imposed on Argentine firms.Business Economics
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Ashworth, Scott 1972. "Elections with incomplete information." Thesis, Massachusetts Institute of Technology, 2001. http://hdl.handle.net/1721.1/8656.
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Thesis (Ph. D.)--Massachusetts Institute of Technology, Dept. of Economics, 2001.Includes bibliographical references (p. 79-82).
This dissertation consists of three chapters exploring the role of incomplete information and learning in elections. The first chapter examines the dynamics of voter learning about candidate ability in repeated elections. The dynamic process of belief revision gives rise to incentives that vary strongly over a politician's career. In particular, candidates become entrenched over time, so, even though they exert little effort, the voter cannot commit to throw incumbents out of office. I embed the basic model in a common agency framework to study seniority norms in legislative organization. The model organizes many of the stylized facts about the U.S. Congress, including the incumbency advantage, the dynamics of effort allocation over a career, the importance of constituency service, and seniority norms in committee assignments. In chapter 2, I study a simple model of campaign finance with possibly asymmetric candidates. Each candidate has the option of promising favors to interest groups in exchange for the funds they need to reveal information to the voters. When the incumbent has a sufficiently large ex-ante advantage, the challenger will be unable to raise funds at all.
(cont.) In this case, incumbent spending is unambiguously too high from the perspective of voter welfare. In fact, if the value of a good candidate is high relative to the value of favors a winner can promise, it will be socially optimal to simultaneously restrict spending by the incumbent and encourage spending by the challenger. In chapter 3, (joint with Aaron Hantman) we propose a simple model of rational learning in elections. A linear approximation to the model is used to justify a version of the Gelman-King (1990) estimator of the incumbency advantage. Restricting the model to elections for which the linear approximation should be valid produce different estimates for the incumbency advantage than those found by either Gelman and King or more traditional studies bases on the "slurge".
by Scott Ashworth.
Ph.D.
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Denti, Tommaso. "Essays on information acquisition." Thesis, Massachusetts Institute of Technology, 2016. http://hdl.handle.net/1721.1/104484.
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Thesis: Ph. D., Massachusetts Institute of Technology, Department of Economics, 2016.Cataloged from PDF version of thesis.
Includes bibliographical references (pages 154-160).
Economic agents often do not interact on the basis of some fixed prior information: choosing what to know is a central part of their interaction. The essays composing this thesis provide and apply theoretical tools to understand information as a choice variable. In the first essay on "Unrestricted Information Acquisition," I study costly information acquisition in games where players can acquire information not only about the state, but also about one another's information in a flexible way. Two main patterns emerges. First, in coordination games, players have a strong incentive to learn what others know: for instance, I show that this can explain the onset of phenomena such as bank runs or currency crises. Second, this incentive weakens as the game gets large and players small: for instance, I show that this leads nonfundamental volatility to vanish in many canonical large games. In the second essay on "Endogenous Informational Smallness," I deepen the investigation of unrestricted information acquisition in large games and show that players end up being informationally small in equilibrium. Information is valuable, but also costly: this is the tradeoff that makes information an economic good. Understanding the cost of information is challenging, since it usually reflects unobservable factors such as time, effort, and cognitive resources. In the third co-authored essay on "Rationally Inattentive Preferences," I highlight basic properties of the cost of information that can be assumed without loss of generality and are necessary and sufficient for identification from observable menu-choice data.
by Tommaso Denti.
Ph. D.
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Ng, Edward Hon Khay. "Public information and foreign exchange rate volatility." Connect to resource, 1990. http://rave.ohiolink.edu/etdc/view.cgi?acc%5Fnum=osu1261503175.
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Foster, Andrew J. "Information, volatility and price discovery in oil futures markets." Thesis, Brunel University, 1994. http://bura.brunel.ac.uk/handle/2438/5871.
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This thesis presents four related empirical essays which investigate the role of information in crude oil futures markets. The first line of investigation examines the impact of futures trading on spot price volatility and finds that the nature of spot price volatility is affected by derivative trading and the improvements in information discovery which such trading brings. Second, the efficiency of futures markets is examined with respect to their ability to provide unbiased estimates of future spot prices. Here it is concluded that while unbiased estimates are generally provided in the long-term, they tend to be largely biased over the short-term. The third area of investigation looks at the relative ability of contemporaneous spot and futures prices to discover information, where it is found that futures generally exhibit price discovery over spot markets but that the relationship can vary considerably over time and in relation to market conditions. In addition, the investigation suggests that previous studies into such relationships have failed to account for all routes through which information passes between spot and futures markets. Finally the thesis probes the question of the relationship within futures markets between volume, volatility and information. The finding is' that futures markets' prices and trading volume exhibit a positive relation and are jointly driven by the rate of information arrival. The results further suggest that the widely held expectation that volume statistics can improve forecasts of future price change does not hold in the case of oil futures. The overall finding of the thesis is that oil futures markets are well-functioning and in general are of benefit to the underlying spot market.
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Redlicki, Jakub. "Essays on economics of information and incentives." Thesis, University of Oxford, 2017. http://ora.ox.ac.uk/objects/uuid:2b5e2d95-8256-4c44-8b8b-a912836a7ba5.
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The first chapter addresses a common presumption in organisational design that employees should not be given discretion about performance measures when offered performance pay. The concern is that they would make a self-serving choice, for example, one that allows them to boost their apparent performance by working on tasks which they find easy but bring little benefit to the company. I investigate this problem in a model in which the principal decides whether to delegate the choice of performance measure to an agent who is privately informed about the degree of substitutability of his effort on different tasks. I show that when the principal is using menus of contracts as a screening device, allowing the agent to choose his performance measure privately - and possibly in a self-serving way - can alleviate the problem of hidden information. Consequently, delegating the choice of performance measure can be complementary to provision of incentives and may increase the principal's payoff. The second chapter analyses the incentives of authoritarian regimes to manipulate information by adding noise to the citizens' information, which is a tactic that is increasingly common in the real world. I consider a global games model in which a regime controls the amount of noise in the citizens' private information and is overthrown if enough citizens attack it. The analysis sheds light on recent findings in political science which show that the Chinese regime uses censorship to prevent collective action rather than criticism of the state per se, and that it employs social media commentators to distract the citizens rather than to persuade them. I show that the better the citizens are informed about the regime, the more its incentives to add noise are driven by the criticism of the state rather than by the need to minimise the size of collective attacks. Furthermore, the incentives to add noise may become stronger if citizens' better coordination comes at the cost of impeded information aggregation. The third chapter, which is co-authored with Bartosz Redlicki (University of Cambridge), studies a game between a biased sender (an interest group) and a decision maker (a policy maker) where the former can falsify scientific evidence at a cost. The sender observes scientific evidence and knows that it will also be observed by the decision maker unless he falsifies it. If he falsifies, then there is a chance that the decision maker observes the falsified evidence rather than the true scientific evidence. First, we investigate the decision maker's incentives to privately acquire independent evidence, which not only provides additional information to her but can also strengthen or weaken the sender's falsification effort. We characterise the circumstances under which the benefit from the additional information is boosted, unaffected, dampened, and fully offset by the adjustment in the sender's falsification strategy. Second, we analyse the decision maker's incentives to acquire information from the sender. We show that she may be better off by committing to pay less than full attention to the sender as this can discourage falsification.
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Demuth, Juri [Verfasser]. "Three essays in information economics / Juri Demuth." Berlin : Freie Universität Berlin, 2012. http://d-nb.info/1030291365/34.
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Friedman, Ezra H. (Ezra Henry) 1969. "Essays on the economics of asymmetric information." Thesis, Massachusetts Institute of Technology, 1998. http://hdl.handle.net/1721.1/10122.
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Reggiani, Giovanni. "Essays in political economics and information acquisition." Thesis, Massachusetts Institute of Technology, 2016. http://hdl.handle.net/1721.1/104489.
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Thesis: Ph. D., Massachusetts Institute of Technology, Department of Economics, 2016.Cataloged from PDF version of thesis.
Includes bibliographical references (pages 95-98).
This thesis consists of three chapters respectively on optimal contracts to incentivize information acquisition, strategic voting, and conflict of interest. The first chapter, joint work with A. Clark, studies a principal-agent problem with limited-liability where an agent is hired to acquire information and take a decision on behalf of a risk-neutral principal. The principal cannot monitor the agent's attentiveness when acquiring information and so she provides incentives with a contract that depends on the realized state of the world and the chosen decision. We build a model for this problem where the agent's cost of acquiring information is given by the average reduction in entropy. We show that the optimal contract has a linear structure: the agent receives a fixed fraction of output together with a state and decision contingent payment. The optimal contract is simple, in terms of dimensionality, and features an incentive structure analogous to that of portfolio managers in the hedge fund industry. We extend this result to problems with arbitrary utilities, a generalized form of cost functions, a participation constraint for the agent, a wealth constraints for the principal, and imperfect revelation of the state. We also show that only entropic costs can generate the separability of state and decision payments and solve for the equivalent optimal contract in a dynamic setting. Lastly we perform Monte Carlo simulations to test the robustness of our initial contract for different utilities and compare its welfare to purely linear and to unrestricted contracts. The second chapter, joint with F. Mezzanotti, provides a lower bound for the extent of strategic voting. Voters are strategic if they switch their vote from their favorite candidate to one of the main contenders in a tossup election. High levels of strategic voting are a concern for the representativity of democracy and the allocation efficiency of government goods and services. Recent work in economics has estimated that up to 80% of voters are strategic. We use a clean quasi experiment to highlight the shortcomings of previous identification strategies, which fail to fully account for the strategic behavior of parties. In an ideal experiment we would like to observe two identical votes with exogenous variation in the party victory probability. Among world parliamentary democracies 104 have a unique Chamber, 78 have two Chambers with different functions, and only one nation has two Chambers with the same identical functions: Italy. This allows us to observe two identical votes and therefore a valid counterfactual. In addition, the majority premia are calculated at the national level for the Congress ballot and at the regional level for the Senate ballot. This provides exogenous variation in the probability of victory. Because the two Chambers have identical functions, a sincere voter should vote for the same coalition in the two ballots. A strategic voter would instead respond to regions' specific victory probabilities. We combine this intuition with a geographical Regression Discontinuity approach, which allows us to compare voters across multiple Regional boundaries. We find much smaller estimates (5%) that we interpret as a lower bound but argue that it is a credible estimate. We also reconcile our result with the literature larger estimates (35% to 80%) showing how previous estimates could have confounded strategic parties and strategic voters due to the use of a non identical vote as counterfactual. The third chapter estimates the distortions due to conflict of interest during Berlusconi's rule over Italy. The identification is based on the efficient market hypothesis. In particular, I use electoral polls and stock market data to estimate the effect of surprising electoral outcomes, defined as the difference between actual and expected electoral results, on the stock market performance of Berlusconi's firms. I find evidence that there are substantial distortions due to conflict of interest: 6% increase in market capitalization per percentage point of a positive electoral surprise. I then match two of Berlusconi's companies operating in the same media sector but in different countries. This allows me to further test whether the extra returns are due to political distortions under different regulatory authorities. I find that the abnormal returns can be ascribed to "conflict of interest" rather than to the CEO-founder stepping down. Finally, I perform robustness tests to ensure that the cumulative abnormal returns estimates are not spurious.
by Giovanni Reggiani.
Ph. D.
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Uthemann, A. "Essays in information economics and market structure." Thesis, University College London (University of London), 2015. http://discovery.ucl.ac.uk/1468998/.
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This thesis analyses three distinct economic problems through the common lens of informational asymmetries. In each chapter we show how market behaviour is best understood as the outcome of differentially informed market participants interacting with each other within the rules specified by the respective market under consideration. Chapter 2 provides an explanation for the variety of contracts offered by competitive firms for seemingly identical products or services, e.g. in mobile communication or personal banking. We show that firms’ menu of tariffs can be understood as screening devices for consumers with mistaken beliefs about their future demand. We furthermore show that while competition between firms prevents firms from exploiting their customers’ limited cognitive ability, competition is not able to correct the inefficiency caused by customers making suboptimal choices. Chapter 3 studies the effect of a financial transaction tax on the trading of a security. We construct a market microstructure model and estimate it using intraday transaction data for a stock traded on the NYSE (Ashland Inc.). The estimates are then used to simulate how a financial transaction tax would impact volume, spreads and informational efficiency in the asset market under consideration. Chapter 4 constructs a model of observational learning with payoff externalities that provides a justification for the use of short term debt in the financing of investment projects. While financing with debt that is subject to roll over risk is often seen as a source of instability, potentially triggering investor runs on financially sound institutions, we show that it can play an important role in facilitating the revelation of privately held information about future performance of the investment.
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Quigley, Daniel Hugh. "Essays in the economics of information disclosure." Thesis, University of Cambridge, 2014. http://ethos.bl.uk/OrderDetails.do?uin=uk.bl.ethos.648766.
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Hopkins, Jeffrey W. "Three Essays on Information and Production Economics." Connect to resource, 1998. http://rave.ohiolink.edu/etdc/view?acc%5Fnum=osu1216928343.
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Yazar, Julide. "Essays in contracting in economies with asymmetric information." Connect to resource, 1999. http://rave.ohiolink.edu/etdc/view.cgi?acc%5Fnum=osu1261322457.
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Li, Wei 1975. "Essays on information and incentives." Thesis, Massachusetts Institute of Technology, 2003. http://hdl.handle.net/1721.1/17624.
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Thesis (Ph. D.)--Massachusetts Institute of Technology, Dept. of Economics, 2003.Includes bibliographical references (p. 145-148).
The first chapter of this thesis analyzes how the gossip process can be manipulated by malicious people and the impact of such manipulation on information transmission. In this model, a single piece of information is transmitted via a chain of agents with privately known types. Each agent may be either objective or malicious, with the latter type aiming to bias the information transmitted. In an indirect-impact gossip model where agents aim to influence a final decisionmaker, the malicious type's equilibrium incentive to make up wrong information is independent of their position in the gossip chain. Moreover, adding just a few malicious people to the population sharply decreases the amount of information transmitted. In a direct-impact gossip model where every malicious agent is concerned about influencing the immediate listener, gossip causes initial contamination of data, but eventually dies out as the objective people stop listening. The second chapter is joint with Botond Koszegi, in which we consider a career concerns model in which an agent's productivity has two components: talent and responsiveness to incentives. We use the term "drive" to reflect people's different responsiveness to incentives, and show that the extra dimension of heterogeneity changes the behavior of agents and the structure of organizations in significant ways. First, since agents more responsive to incentives are expected to work harder-and therefore be paid more-than less driven ones, everyone might be induced to work hard to signal that they are driven. Over a long horizon, these "drive-signaling incentives" have a tendency to bootstrap themselves, and, if this effect is strong enough, to create significant incentives with little else motivating the agent. On the other hand, signaling one's drive can be detrimental, because past outputs will be taken by the principal to reflect lower ability. Thus, drive-signaling incentives are likely to increase effort early in the career and decrease it later. We discuss in detail a consequence of our framework for organizational design. To maximize effort, the principal wants to observe a measure of the agent's effort (say, his hours worked) early, but not late, in the career.
(cont.) The third chapter models how people's improving ability to observe the state of the world interacts with their incentive to reveal their information truthfully. A principal makes a decision based on a sequence of reports from an agent with reputational concerns. Agents with privately known ability receive signals of different initial quality, as well as varying speed of quality improvement. Thus both the accuracy and the sequencing of the reports affect the principal's perception of the agent's ability. This paper has three main findings. First, in equilibrium, mind changes or inconsistent reports may be more valued by the market as a sign of talent and fast improvement, yet mediocre agents still repeat their early opinion more frequently because they have less relative confidence in their signal quality improvement. Second, sequential reporting can be superior to a final reporting system ...
by Wei Li.
Ph.D.
39
Xandri, Antuña Juan P. (Juan Pablo). "Essays on information and incentives." Thesis, Massachusetts Institute of Technology, 2013. http://hdl.handle.net/1721.1/81053.
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Thesis (Ph. D.)--Massachusetts Institute of Technology, Dept. of Economics, 2013.Cataloged from PDF version of thesis.
Includes bibliographical references (p. 163-168).
This thesis studies problems of belief and information formation of agents, and its effect on incentive provision in problems of experimental and mechanism design. Chapter 1 is based on joint work with Arun Chandrasekhar and Horacio Larreguy. In this chapter we present the results of an experiment we conducted in rural Karnataka, India, to get evidence on how agents learn from each other's actions in the context of a social network. Theory has mostly focused on two leading models of social learning on networks: Bayesian updating and local averaging (DeGroot rules of thumb) which can yield greatly divergent behavior; individuals employing local averaging rules of thumb often double-count information and, in our context, may not exhibit convergent behavior in the long run. We study experiments in which seven individuals are placed into a network, each with full knowledge of its structure. The participants attempt to learn the underlying (binary) state of the world. Individuals receive independent, identically distributed signals about the state in the first period only; thereafter, individuals make guesses about the underlying state of the world and these guesses are transmitted to their neighbors at the beginning of the following round. We consider various environments including incomplete information Bayesian models and provide evidence that individuals are best described by DeGroot models wherein they either take simple majority of opinions in their neighborhood Chapter 2 is based on joint work with Arun Chandrasekhar, and studies how researchers should design payment schemes when making experiments on repeated games, such as the game studied in Chapter 1. It is common for researchers studying repeated and dynamic games in a lab experiment to pay participants for all rounds or a randomly chosen round. We argue that these payment schemes typically implement different set of subgame perfect equilibria (SPE) outcomes than the target game. Specifically, paying a participant for a randomly chosen round (or for all rounds with even small amounts of curvature) makes the game such that early rounds matter more to the agent, by lowering discounted future payments. In addition, we characterize the mechanics of the problems induced by these payment methods. We are able to measure the extent and shape of the distortions. We also establish that a simple payment scheme, paying participants for the last (randomly occurring) round, implements the game. The result holds for any dynamic game with time separable utility and discounting. A partial converse holds: any payment scheme implementing the SPE should generically be history and time independent and only depend on the contemporaneous decision. Chapter 3 studies a different but related problem, in which agents now have imperfect information not about some state of nature, but rather about the behavior of other players, and how this affects policy making when the planner does not know what agents expects her to do. Specifically, I study the problem of a government with low credibility, who decides to make a reform to remove ex-post time inconsistent incentives due to lack of commitment. The government has to take a policy action, but has the ability to commit to limiting its discretionary power. If the public believed the reform solved this time inconsistency problem, the policy maker could achieve complete discretion. However, if the public does not believe the reform to be successful some discretion must be sacrificed in order to induce public trust. With repeated interactions, the policy maker can build reputation about her reformed incentives. However, equilibrium reputation dynamics are extremely sensitive to assumptions about the publics beliefs, particularly after unexpected events. To overcome this limitation, I study the optimal robust policy that implements public trust for all beliefs that are consistent with common knowledge of rationality. I focus on robustness to all extensive-form rationalizable beliefs and provide a characterization. I show that the robust policy exhibits both partial and permanent reputation building along its path, as well as endogenous transitory reputation losses. In addition, I demonstrate that almost surely the policy maker eventually convinces the public she does not face a time consistency problem and she is able to do this with an exponential arrival rate. This implies that as we consider more patient policy makers, the payoff of robust policies converge to the complete information benchmark. I finally explore how further restrictions on beliefs alter optimal policy and accelerate reputation building.
by Juan P. Xandri Antuña.
Ph.D.
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Abaluck, Jason T. "Information, decision-making and health." Thesis, Massachusetts Institute of Technology, 2011. http://hdl.handle.net/1721.1/65482.
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Thesis (Ph. D.)--Massachusetts Institute of Technology, Dept. of Economics, 2011.Cataloged from PDF version of thesis.
Includes bibliographical references (p. 151-155).
This thesis consists of three essays on information, decision-making and health. All three concern the relationship between the choices consumers would make if they were "fully informed" in an appropriate sense and the choices we actually observe. Chapter 1 considers how we can determine whether consumers are appropriately taking into account health information when they make their food consumption decisions. The fundamental idea is to determine the value of a statistical life (VSL) implicit in food consumption decisions and to compare this value with previous estimates of the VSL. The main positive result is that the VSL estimated from food consumption is about 1/10th as large as estimates from other contexts. I also consider the normative implications under the assumption that VSL estimates from other contexts indicate how individuals would behave if they were "fully informed" and discuss what additional evidence might support such an assumption. Chapter 2, co-authored with Jonathan Gruber, performs an analogous exercise in the case of health care plans. Where Chapter 1 makes the normative assumption that consumers should value years of life equally regardless of where they come from (e.g. eating healthier foods or reducing risk of on-the-job death), Chapter 2 makes the normative assumption that consumers should value a dollar of cost savings equivalently whether it comes through premiums or out of pocket costs. This restriction can then be used to evaluate whether consumers are choosing appropriately. The chapter studies this question in the context of Medicare Part D Prescription Drug Plan, the most significant privatization of the delivery of a public insurance benefit in recent history. Chapter 3 attempts to consider the circumstances in which the partial equilibrium welfare analyses performed in parts 1 and 2 extend to a general equilibrium setting in which prices and product characteristics respond endogenously to changes in demand. In particular, Chapter 3 derives conditions under which more information leads to welfare gains in general equilibrium taking into account the endogenous response of firms' pricing and product quality decisions.
by Jason Abaluck.
Ph.D.
41
Kurlat, Pablo (Pablo Daniel). "Essays on liquidity and information." Thesis, Massachusetts Institute of Technology, 2010. http://hdl.handle.net/1721.1/57999.
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Thesis (Ph. D.)--Massachusetts Institute of Technology, Dept. of Economics, 2010."June 2010." Cataloged from PDF version of thesis.
Includes bibliographical references (p. 126-131).
This dissertation studies the interaction of liquidity and incomplete or asymmetric information. In Chapter 1, I study a dynamic economy with illiquidity due to adverse selection in financial markets. Investment is undertaken by borrowing-constrained entrepreneurs. They sell their past projects to finance new ones, but asymmetric information about project quality creates a lemons problem. The magnitude of this friction responds to aggregate shocks, amplifying the responses of asset prices and investment. Indeed, negative shocks can lead to a complete shutdown in financial markets. I then introduce learning from past transactions. This makes the degree of informational asymmetry endogenous and makes the liquidity of assets depend on the experience of market participants. Market downturns lead to less learning, worsening the future adverse selection problem. As a result, transitory shocks can create highly persistent responses in investment and output. In Chapter 2, I study why firms can choose to be illiquid. Optimal incentive schemes for managers may involve liquidating a firm following bad news. Fragile financial structures, vulnerable to runs, have been proposed as a way to implement these schemes despite their ex-post inefficiency. I show that in general these arrangements result in multiple equilibria and, even allowing arbitrary equilibrium selection, they do not necessarily replicate optimal allocations. However, if output follows a continuous distribution and creditors receive sufficiently precise individual early signals, then there exists a fragile financial structure such that global games techniques select a unique equilibrium which reproduces the optimal allocation. In Chapter 3, I study speculative attacks against illiquid firms. When faced with a speculative attack, banks and governments often hesitate, attempting to withstand the attack but giving up after some time, suggesting they have some ex-ante uncertainty about the magnitude of the attack they will face. I model that uncertainty as arising from incomplete information about speculators' payoffs and find conditions such that unsuccessful partial defenses are possible equilibrium outcomes. There exist priors over the distribution of speculators' payoffs that can justify any possible partial defense strategy. With Normal uncertainty, partial resistance is more likely when there is more aggregate uncertainty regarding agents' payoffs and less heterogeneity among them.
by Pablo Kurlat.
Ph.D.
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Reuter, Jonathan Michael 1973. "Essays on information and investment." Thesis, Massachusetts Institute of Technology, 2002. http://hdl.handle.net/1721.1/8417.
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Thesis (Ph.D.)--Massachusetts Institute of Technology, Dept. of Economics, 2002.Includes bibliographical references.
This dissertation consists of three empirical essays related to information and investment. The first essay asks whether investments in advertising bias the information consumers receive about advertisers' products. Using ratings from two U.S. wine publications, only one of which accepts advertising, I find that advertisers earn differentially higher ratings than non-advertisers and that these higher ratings appear to arise through selective retastings of advertisers' wines before ratings are published. However, the small fraction of wines tasted more than once limits this bias and suggests that reputational considerations may induce publications largely to insulate reviewers from advertisers. The second essay asks whether investments in research by mutual fund families increase the returns of their actively managed funds. Using detailed expense data from 1996-1999, I find evidence that funds recover a fraction of their management fees and brokerage commissions through higher before-expense returns, but that these results are driven by positive relationships between expenses and returns in 1999. I then find more robust positive relationships between aggregate measures of research spending within the family and fund-level returns. Finally, I find that pairwise correlations of fund returns are significantly higher, on average, when both funds belong to the same family, and that these higher correlations are not simply the result of management team overlap. The final essay (joint with Eric Zitzewitz) asks whether the recent rise and fall of U.S. financial markets had real economic consequences in online auctions for fine wine.
(cont.) Using data from 63 auctions covering the 30 months from July 1999 through December 2001, we document a strong positive relationship between the number of bottles sold within an auction and fluctuations of the S&P 500 index during that auction. While average prices tend to decline as the number of bottles sold increases, we also present evidence that price changes of the rarest and most famous wines are positively correlated with stock market returns. Overall, our results imply that investors may respond more quickly to short-run changes in stock market wealth than existing theoretical and empirical work has suggested.
by Jonathan Michael Reuter.
Ph.D.
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Levin, Jonathan David 1972. "Relational contracts, incentives and information." Thesis, Massachusetts Institute of Technology, 1999. http://hdl.handle.net/1721.1/9520.
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Thesis (Ph.D.)--Massachusetts Institute of Technology, Dept. of Economics, c1999.Includes bibliographical references.
Chapter 1: I study the design and functioning of self-enforcing incentive contracts under imperfect observability, using a model of repeated agency that allows for both common and private performance monitoring. When performance measures are mutually observed, optimal relational agreements always keep the parties on the Pareto frontier. When performance measures are privately observed, self-enforcing agreements involve the possibility of separation on the equilibrium path, but optimal contracts still take a basic "termination" form. Using these results, one can view optimal long-term contracts as the solution to a static optimization problem. I use this static program to describe the shape of optimal contracts and the nature of second-best inefficiencies. Under standard conditions, optimal moral hazard contracts are "one-step" - a fixed discretionary transfer is made to the agent any time performance is above some cut-off. Hidden information contracts are also characterized and it is shown that optimal contracts call for effort distortion by all types. Chapter 2: This chapter considers self-enforcing relational contracts between a firm and many agents. Even when contracting opportunities are technologically independent, firms will benefit from reaching multilateral contracts that link their transactional arrangements. Optimal multilateral contracts equalize the shadow cost of incentive constraints on each relationship, something bilateral contracts will generally fail to do. I derive some novel implications for asset ownership and ex ante investment, and consider ways in which firms might be able to use existing relationships as "leverage" in reaching new agreements. I also investigate conditions under which firms might want to refrain from multilateral contracting and conduct relationships separately - this may be the case if firm is concerned about a breakdown in one relationship acting as a catalyst that brings down others. The results are applied to discuss two-tier workforce arrangements, supplier associations and the prevalence of diversified business groups in developing countries. Chapter 3: A seminal theorem due to Blackwell (1951) shows that every Bayesian decision-maker prefers an informative signal Y to another signal X if and only if Y is statistically sufficient for X. Sufficiency is an unduly strong requirement in most economic!'problems because it does not incorporate any structure the model might impose. This chapter develops a general theory of information that allows a characterization of the information preferences of decision-makers based on how their marginal returns to acting vary with the underlying (unknown) state of the world. The analysis focuses on "monotone decision problems," in which all decision-makers in the relevant class choose higher actions when higher values of the signal are realized. This restriction allows a characterization of information preferences in terms of stochastic dominance orders over distributions of posterior beliefs. Conditions are also given under which one decision-maker has a higher marginal value of information than another decision-maker, and thus will acquire more information. The results are applied to oligopoly models, labor markets with adverse selection, hiring problems, and a coordination game. (This chapter is co-authored with Susan Athey.) Chapter 4: This chapter revisits Akerlof's classic adverse selection market and asks the following question: do greater information asymmetries reduce the gains from trade? Perhaps surprisingly, the answer is no. Greater asymmetries worsen the "buyer's curse," thus lowering the demand curve, but may shift the supply curve as well. Whether trade increases or decreases depends on where the information impacts the market. A characterization is given for the case of partition information and then for the general case using a definition of information formulated in the previous chapter.
by Jonathan David Levin.
Ph.D.
44
Gitmez, Ahmet Arda. "Essays on markets and information." Thesis, Massachusetts Institute of Technology, 2019. https://hdl.handle.net/1721.1/122445.
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Thesis: Ph. D., Massachusetts Institute of Technology, Department of Economics, 2019Cataloged from PDF version of thesis.
Includes bibliographical references (pages 147-154).
This thesis contains three chapters on the interplay between markets and information. In the first chapter, I study how market opportunities influence the information revealed in longterm relationships. To this end, I build a model of employment relationships where the worker has private information about match quality, the firm learns about match quality over time, and the firm makes a match-specific investment. Improved market opportunities for workers promote productive relationships because they let the worker signal her firm-specific productivity by forgoing market opportunities. Signaling allows the firm to bypass the learning stage and encourages investment (signaling effect). Improved market opportunities for firms, however, discourage longterm relationships and undermine investment incentives (layoffs effect). I embed the relationship game in a search market equilibrium where market opportunities for both parties depend on search frictions and market thickness.
With intermediate values of market thickness, relationship productivity and worker welfare are u-shaped in search frictions: when search frictions decrease from high to intermediate levels, the layoffs effect dominates; when search frictions are sufficiently low, the signaling effect dominates. In the second chapter, joint with Umut Dur, Parag Pathak and Tayfun Sdnmez, I study the effects of enlarging the message space to allow for further information revelation in centralized markets. School districts with choice plans struggle to expand access to schools across neighborhoods while keeping busing costs down. Existing assignment mechanisms allow students to rank a school, but do not elicit preferences about transportation. Typically, if a student is assigned far from home, the district provides transportation. We propose enlarging the message space in the mechanism by allowing students to apply to a school both with and without transportation.
Under our proposal, a non-neighborhood applicant who is willing to forgo transportation services obtains a greater chance of being assigned to a school. In decentralized admissions systems, we show that this option reduces transportation but not access for non-neighborhood applicants. We then generalize these results to a centralized assignment mechanism under special conditions. Expanding the message space provides a new tool for distributional objectives that operates in a different fashion than more traditional levers like changing priorities or choice sets. In the third chapter, joint with Pooya Molavi, I study an information design problem. We present a model of media capture, a politician having control over the editorial policies of media.
At the heart of the model is the trade-off faced by a politician who wants to persuade the citizens: she wants to capture the media and produce news in her favor, but capture leads the citizens to not follow the media as they find them uninformative. The model is a Bayesian persuasion model (a la Kamenica and Gentzkow (2011)) with an audience of heterogeneous priors. We identify conditions on the distribution of priors that guarantee full information revelation and no information revelation by the captured media. The model also has several testable predictions: (i) the information content of the news provided by the captured media decreases as the politician becomes more popular, (ii) in societies with more extremists than moderates, the media are more likely to produce "negative" news than "positive" ones, and (iii) in societies where the media are less accessible to citizens, they are more informative.
by Ahmet Arda Gitmez.
1. Search, Matching, and Signaling: Do Markets Help Relationships? -- 2. Busing with Contracts: Message Spaces as a Design Tool in School Choice -- 3. Media Capture: A Bayesian Persuasion Approach.
Ph. D.
Ph.D. Massachusetts Institute of Technology, Department of Economics
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Sippl-Swezey, Nicolas. "Heterogeneous gain forecasting using historic asset information." Oberlin College Honors Theses / OhioLINK, 2011. http://rave.ohiolink.edu/etdc/view?acc_num=oberlin1354304083.
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Baldwin, Kenneth. "The economics of information and piecewise linear limited liability profit sharing contracts." Thesis, Loughborough University, 2000. https://dspace.lboro.ac.uk/2134/27586.
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This thesis makes a theoretical contribution to the design of profit-sharing contracts which maximise the surplus a principal extracts from an agency relationship, whereby a pay floor limits the liability of an agent in low profit states, and information is either unilaterally or bilaterally asymmetric.
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Roberts, Stephen Paul, and Stephen Paul Roberts. "Effects of Incomplete Information: Partial Buyer Information, Optimal Risk Incentivization, and Use of Non-Monotonic Contracts." Diss., The University of Arizona, 2016. http://hdl.handle.net/10150/621122.
Full textAbstract:
This dissertation considers three problems related to the issue of asymmetric information. The first problem is that of increased information in markets with unknown quality. I show that an increase in information need not produce an increase in market efficiency, even if the volume of trade in the market increases. The second problem is the use of non-monotonic contracts. I show that subjects do not typically employ non-monotonic contracts when they are optimal, although they will more frequently if they know the agent receiving the contract is fully rational and profit-maximizing. The third problem is the use of relative performance evaluation in situations where agents make risky decisions. I show that relative performance evaluation is rarely better, and frequently worse, than other contracting structures.
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Ramada, Paula Cristina. "Essays on asymmetric information and markets." Thesis, Massachusetts Institute of Technology, 1997. http://hdl.handle.net/1721.1/10324.
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Hendren, Nathaniel. "Essays on information and insurance markets." Thesis, Massachusetts Institute of Technology, 2012. http://hdl.handle.net/1721.1/72830.
Full textAbstract:
Thesis (Ph. D.)--Massachusetts Institute of Technology, Dept. of Economics, 2012.Cataloged from PDF version of thesis.
Includes bibliographical references (p. 135-138).
This thesis studies the impact of private information on the existence of insurance markets. In the first chapter, I study the case of insurance rejections. Across a wide set of non-group insurance markets, applicants are rejected based on observable, often high-risk, characteristics. I explore private information as a potential cause by developing and testing a model in which agents have private information about their risk. I derive a new no-trade result that can theoretically explain how private information could cause rejections. I use the no-trade condition to generate measures of the barrier to trade private information imposes. I develop a new empirical methodology to estimate these measures that uses subjective probability elicitations as noisy measures of agents' beliefs. I apply the approach to three non-group markets: long-term care (LTC), disability, and life insurance. Consistent with the predictions of the theory, in all three settings I find significant evidence of private information for those who would be rejected; I find that they have more private information than those who can purchase insurance; and I find that it is enough to cause a complete absence of trade. This presents the first empirical evidence that private information leads to a complete absence of trade. In the second chapter, I show that private information explains the absence of a private unemployment insurance market. I provide the empirical evidence that a private UI market would be afflicted by private information and suggest the amount of private information is sufficient to explain a complete absence of trade. I present evidence a private market would still not arise even if the government stopped providing unemployment benefits. Finally, in the third chapter I use the empirical and theoretical tools developed in the first chapter to explore the impact of an adjusted community rating policy that would force insurance companies to only price based on age. My results suggest such a policy would completely unravel the LTC insurance market. Not only would welfare not be improved for those who are currently rejected, but the regulation would prevent the healthy from being able to purchase long-term care insurance.
by Nathaniel Hendren.
Ph.D.
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Dai, Yifan. "Essays on information, search and pricing." Diss., University of Iowa, 2017. https://ir.uiowa.edu/etd/5743.
Full textAbstract:
This dissertation consists of three essays in microeconomic theory with an emphasis on consumer search and strategic experimentation. Among many issues, I shed some lights on search frictions, commitment and information.
In Chapter 1, we consider an oligopoly model in which consumers engage in sequential search based on partial product information and advertised prices. We derive a simple condition that fully summarizes consumers' shopping outcomes and use the condition to reformulate the pricing game among the sellers as a familiar discrete-choice problem. Exploiting the reformulation, we provide sufficient conditions that guarantee the existence and uniqueness of pure-strategy market equilibrium and obtain several novel insights about the effects of search frictions on market prices. Among others, we show that a reduction in search costs increases market prices, but providing more pre-search information raises market prices if and only if there are sufficiently many sellers.
In Chapter 2, I study the effects of limited price commitment on consumer search and optimal pricing. I consider an environment in which consumers are uncertain about a seller's commitment to the advertised price. I characterize the set of pure-strategy equilibria and find that a higher degree of commitment is beneficial to the consumers. I evaluate the effects of regulation that limits the extent of a seller's deviation from the advertised price and demonstrate that stricter regulation may not be welfare improving. I also consider the case where sellers have heterogeneous levels of commitment power and investigate how the difference in commitment power influences market outcomes. I find that a higher degree of commitment does not direct consumers' search order when all sellers have limited commitment. Conversely, full commitment allows a seller to dictate consumers' visit when his rivals have limited commitment. Finally, I show that the impact of search costs on prices depends on the level of commitment, the magnitude of the search cost and whether consumers have ex-ante heterogenous valuations of the product.
In Chapter 3, we consider a two-player exit game in which each player faces a one-armed bandit problem and the two players' types are negatively correlated. We provide a closed-form characterization of the unique (perfect Bayesian) equilibrium of the game. We show that, in stark contrast to the case of positive correlation, the players exit the game at an increasing rate over time and one player exits for sure before a deterministic time.