Research

WORKING PAPERS

Authority and Specialization under Informational Interdependence (accepted at RAND)

Abstract: We study authority allocation to incentivize information acquisition under interdependence. Agents access noisy signals about two states of the world. Besides costs, acquisition depends on the expected influence on decisions, determined by whether authority is centralized or split among decision-makers. Restricting an agent’s information on the extensive margin improves communication. When such \textit{specialization} is not feasible, informational congestion can have similar incentive effects. Split authority can lead decision-makers to lose perspective due to failures to internalize interdependence. Our findings suggest that multinational corporations should balance centralized and decentralized authority to enhance information flow and decision-making across diverse products and regions.

Policy-advising Competition and Endogenous Lobbies (with Manuel Foerster, submitted)

Abstract: We investigate Bertrand competition between experts in a policy-advising market. In our baseline model, a policy-maker can either acquire information himself or hire a biased but well-informed expert. We show that the expert charges a fee if policy preferences are roughly aligned but pays contributions to get the decision delegated--thus acting as a lobbyist instead of as an advisor--if her net benefit from delegation exceeds the net loss of the policy-maker. We then present a general model of competition, characterizing equilibria and showing that competition reduces the cost of advice and may even cause an expert previously hired at a positive price to engage in lobbying. Finally, we apply the general model to competition between experts with different motives, showing that hiring (competition from) a good expert may decrease social welfare if the policy issue is narrow and mainly concerns the policy-maker's own voters.

Information Aggregation in Multidimensional Cheap Talk (new version coming soon)

Abstract: I examine a cheap talk game with multiple interdependent decisions, in which biased senders privately observe information about payoff-relevant states. I find that senders are willing to use open (state-specific) communication channels to strategically convey information about other states that otherwise cannot be revealed. In equilibrium, this leads to a loss of credibility that reduces the set of parameters for which communication is incentive compatible. The credibility loss associated with a sender arises when a given piece of information is relevant for both low- and high-conflict decisions. Surprisingly, when the receiver is expected to observe more of such information on path, the associated credibility loss recedes---i.e. the sender is more willing to reveal information that is only relevant for low-conflict decisions. Finally, I fully characterize communication equilibria in a simple version of the model, which I later use as a baseline to analyze the interaction between informational interdependence and preferences for coordinated decisions.

WORK IN PROGRESS

Diversity and Empowerment in Organizations (with Nicolás Riquelme)

Incentives to Innovate and Multinational Competition (with Sébastien Mitraille)

Organizational Design and the Acquisition of Imperfect Information (with Manuel Foerster)