Publications:
Settlements under Unequal Access to Justice (with Madina Kurmangaliyeva), Journal of Economic Behavior and Organization 193, pp. 237– 268.
Optimal Information Disclosure in Contests with Stochastic Prize Valuations (with Mariya Teteryatnikova), Economic Theory.
Working Papers:
Optimal Allocation of Multi-Dimensional Prizes in Contests with Heterogeneous Agents (PDF) – R&R in Economic Theory
We develop a model where two players with asymmetric preferences engage in a contest game. The key novelty is the introduction of multi-dimensional rewards. We characterize the optimal prize allocation that maximizes aggregate effort. When heterogeneity in preferences is strong and the designer cannot assign identity-dependent prizes, the loser must get a positive reward, which is in stark contrast to the existing literature. Such allocation eliminates the advantage of the stronger competitor and incentivizes the opponent to exert more effort (the equilibrium effect). Using data from twelve professional tennis competitions where prizes include money and the ATP ranking points, we test our theoretical predictions empirically. The identification strategy relies on exogenous variation in prizes over both dimensions and random matching between the players. We document the equilibrium effect in the data and recover the underlying preference profiles that define its direction.
Optimal Information Disclosure in Contests with Communication (PDF) – R&R in Theory and Decision
We study optimal information disclosure in static contests where contestants are initially uninformed about their values of winning but can learn them, publicly or privately, from a designer. The designer, who maximizes total effort, chooses a disclosure policy and commits to it before observing the realized value profile. A key feature of our model is that contestants who receive private information can subsequently communicate by exchanging truthful messages. We show that contestants share their private information if and only if their values of winning are positively correlated. However, such communication often induces an asymmetric contest, thereby reducing total effort. Consequently, the designer strictly prefers to conceal all information to keep the competition even. This result is in stark contrast to the no communication benchmark, where private disclosure is optimal under positive correlation. Our findings are robust to player-specific disclosure rules and sufficiently small information acquisition costs.
Optimal Information Disclosure in Competing Contests with Budget Constrained Players (PDF) – R&R in Journal of Economic Behavior and Organization
This paper studies optimal information disclosure in two competing contests where contestants face a constraint on their total effort contribution, or budget. The contestants are ex ante uninformed about the value of the prize to be allocated in one of the contests. Before the game starts, the designer of a contest with the unknown prize value chooses a public disclosure rule that maximizes the total effort exerted in her competition, and commits to it. We find that the optimal disclosure rule is generally not unique and can reveal (at least some) information to the contestants. In the absence of competition for effort among contests, the size of the budget has a non-monotonic effect on the designer’s incentives to share information. When competition for effort is at place, the designer’s incentives to share information decline with the size of the budget, which is driven by the substitution effect that forces contestants to reallocate their effort towards a competition with a higher perceived prize.
Flexible or Uniform? Optimal Pricing Strategies of Chains (with Ekaterina Kazakova and Alexander Tarasov) (PDF) – submitted
We develop a model of spatial competition with two heterogeneous in their market access chains, choosing between third-degree price discrimination in their local markets (flexible pricing) and a unified chain-level price (uniform pricing). The markets are interconnected with each other via consumers who commute between them and can make purchases in locations where they do not reside. Our model supports an asymmetric equilibrium, in which the two pricing strategies co-exist: the larger chain uses uniform pricing, while the smaller chain employs flexible pricing. We also find that the chains never choose the pricing strategies that maximize the total consumer surplus.
Support Link Formation in Contests (with Mariya Teteryatnikova, James Tremewan, and Alexander Usvitskiy) (PDF) – submitted
We use theory and an experiment to investigate how support relationships develop endogenously in view of a future contest, and how those relationships affect contestant investment. We introduce a two-stage game, in which two competing players form support links with a third, indirectly involved player before proceeding to the contest stage. We characterize conditions under which players form support links, and study how links influence contest outcomes. An experiment provides partial support for the theory, however we find patterns of over-investment that cannot be explained by standard behavioural phenomena such as “joy of winning” and reciprocity.
Work in Progress:
Strategic Attacks in Networks (with Mariya Teteryatnikova)
Dormant Projects:
When Justice is Hurried and When is it Buried? Wealth Inequality and the Duration of Cases in Court (with Madina Kurmangaliyeva)
Adverse Selection in Job Promotion Contests with Multi-dimensional Skills (with Anna Ponomarenko)