This paper studies a game in which an informed sender with state-independent preferences uses verifiable messages to convince a receiver to choose an action from a finite set. We characterize the equilibrium outcomes of the game and compare them with commitment outcomes in information design. We provide conditions for a commitment outcome to be an equilibrium outcome and identify environments in which the sender does not benefit from commitment power. Our findings offer insights into the interchangeability of verifiability and commitment in applied settings.
Shopping Malls, Platforms and Consumer Search
with
Alexei ParakhonyakInternational Journal of Industrial Organization
We consider a model of a market for differentiated goods in which firms are located in marketplaces e.g., shopping malls or platforms. There are search frictions between marketplaces, but not within. Marketplaces differ in size. We show that an equilibrium in which consumers start their search at the largest marketplace and continue in the descending order of size, always exists. Despite charging lower prices, firms in larger marketplaces earn higher profits. Under free entry, all firms cluster in one marketplace provided that search frictions are large enough. If a marketplace determines the price of entry, then the equilibrium marketplace size is a single-peaked function of search costs and is decreasing for most of the search cost range.
We study a class of finite-action disclosure games where the sender’s preferences are state independent and the receiver’s optimal action depends only on the expected state. While receiver-preferred equilibria in these games involve full revelation, other equilibria are less well-understood. We show that any equilibrium payoff can be obtained with a disclosure strategy corresponding to a partition with a laminar structure that allows pooling nonadjacent states. In a sender-preferred equilibrium, such a structure balances inducing more sender-favorable actions and deterring deviations. Leveraging this insight, we identify conditions under which the sender does not benefit from commitment power and apply these results to study influencing voters and selling with quality disclosure.
Targeted Advertising in ElectionsR&R at AEJ: Microeconomics
How does targeted advertising influence electoral outcomes? This paper presents a one-dimensional spatial model of voting in which a privately informed challenger persuades voters to support him over the status quo. I show that targeted advertising enables the challenger to persuade voters with opposing preferences and swing elections decided by such voters; under simple majority, the challenger can defeat the status quo even when it is located at the median voter’s bliss point. Ex-ante commitment power is unnecessary—the challenger succeeds by strategically revealing different pieces of verifiable information to different voters. Publicizing all political ads would mitigate the negative effects of targeted advertising and help voters collectively make the right choice.
Revealed and Concealed Repression: Measurement, Deterrence, and Backlash
with
Emily Hencken Ritter
and
Mehdi ShadmehrR&R at American Political Science Review
Regimes routinely conceal acts of repression. We show that observed repression may be negatively correlated with total repression—which includes both revealed and concealed acts—across time and space. This distortion implies that policy interventions aimed at reducing repression by incentivizing regimes can produce perverse effects. It also poses challenges for research evaluating the efficacy of repression—its deterrent and backlash effects. To address this, we develop a model in which regimes choose both whether to repress and whether to conceal repression. We leverage equilibrium relationships to propose a method for recovering concealed repression using observable data. We then provide an informational theory of deterrence and backlash effects, identifying the conditions under which each arises and intensifies. Finally, we show that comparing protest probabilities in the presence and absence of repression provides an upper bound on the size of the backlash effect, overstating its magnitude and thereby underestimating the efficacy of repression.
We analyze the equilibrium set of a general game of verifiable disclosure with type-independent sender preferences and propose coalition proofness among sender types as an equilibrium selection criterion. We provide recursive algorithms that output all equilibrium strategies and all coalition-proof equilibrium strategies. We provide four sets of conditions on the sender’s payoff function and the mapping from sender types to available messages that guarantee existence of a coalition-proof equilibrium. We show when coalition proofness coincides with existing equilibrium selection methods such as receiver optimality and truth-leaning. We geometrically characterize the sender’s ex-ante utility in the coalition-proof equilibrium of a disclosure game with a rich message space and compare it to its counterparts in cheap talk and Bayesian persuasion.
This paper studies a model of costly sequential search among risky alternatives performed by a group of agents. The learning process stops, and the best uncovered option is implemented when the agents unanimously agree to stop or when all the projects have been researched. Both the implemented project and all the information gathered during the search process are public goods. I show that the equilibrium path implements the same project based on the same information gathered in the same order as the social planner. At the same time, due to free riding, search in teams leads to a delay at each stage of the learning process, which grows with search costs. Consequently, the team manager prefers to delegate the search to an individual agent. In contrast, every agent prefers searching with a partner, since she collects the same reward but only pays the search cost half the time.
Work in Progress
Political Messaging and Voter Learning
with
Renee Bowen
,
J. Lawrence Broz
, Santiago Cantillo-Cleves and Yung-Chun Chen