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Essays on Information Economics
Matysková, Ludmila ; Steiner, Jakub (advisor) ; Kamenica, Emir (referee) ; Dean, Mark (referee)
In the first chapter, we study the effect on the economy of platforms for online consumer reviews. Consumer reviews may have perverse effects, including delays in the adoption of new products of unknown quality when consumers are boundedly rational. When consumers fail to take into account that past reviewers self-select into purchases, a monopolist may manipulate the posterior beliefs of consumers who observe the reviews, because the product price determines the self-selection bias. The monopolist will charge a relatively high price because the positive selection of the early adopters increases the quality reported in the reviews. In the second chapter, we study a game between a sender and a receiver in a framework of Bayesian persuasion. A sender choosing a signal to be disclosed to a receiver can often influence the receiver's actions. Is persuasion more difficult when the receiver has additional information sources? Does the receiver benefit from having the additional sources? We extend a Bayesian persuasion model to a receiver's acquisition of costly information. The game can be solved as a standard Bayesian persuasion model under an additional constraint: the receiver never gathers her own costly information. The `threat' of learning hurts the sender. However, the resulting outcome can also...
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Essays on Costly Information Acquisition in Economics
Novák, Vladimír ; Matějka, Filip (advisor) ; Dean, Mark (referee) ; Romagnoli, Giorgia (referee)
Essays on Costly Information Acquisition in Economics Vladimír Novák Abstract In the first chapter, we solve the two-armed bandit problem when decision-makers are risk-averse. We show - counterintuitively - that a more risk-averse decision-maker might be more willing to take risky actions. This finding relates to the fact that pulling the risky arm in bandit models produces information on the environment - thereby reducing the risk that a decision-maker will face in the future. Thus, we suggest there is reason for caution when inferring risk preferences from observed actions: in a bandit setup, observing a greater appetite for risky actions can be indicative of more risk aversion, not less. In the second chapter, we characterize when it is rational to acquire information leading to belief polarization, in situations that involve a choice between the implementation of a new policy with an uncertain outcome and the preservation of the status quo. Specifically, we model the agent to be rationally inattentive: any information about the new policy can be acquired before the choice is made, but doing so is costly. We show how the choice of information, and thus the belief formation, depends on the agent- specific value of the status quo. Importantly, beliefs can then, in expectations, update away from the...
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Essays on Information Economics
Matysková, Ludmila ; Steiner, Jakub (advisor) ; Kamenica, Emir (referee) ; Dean, Mark (referee)
In the first chapter, we study the effect on the economy of platforms for online consumer reviews. Consumer reviews may have perverse effects, including delays in the adoption of new products of unknown quality when consumers are boundedly rational. When consumers fail to take into account that past reviewers self-select into purchases, a monopolist may manipulate the posterior beliefs of consumers who observe the reviews, because the product price determines the self-selection bias. The monopolist will charge a relatively high price because the positive selection of the early adopters increases the quality reported in the reviews. In the second chapter, we study a game between a sender and a receiver in a framework of Bayesian persuasion. A sender choosing a signal to be disclosed to a receiver can often influence the receiver's actions. Is persuasion more difficult when the receiver has additional information sources? Does the receiver benefit from having the additional sources? We extend a Bayesian persuasion model to a receiver's acquisition of costly information. The game can be solved as a standard Bayesian persuasion model under an additional constraint: the receiver never gathers her own costly information. The `threat' of learning hurts the sender. However, the resulting outcome can also...
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