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, R&R at Journal of Public Economics)

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.

Diversity and Empowerment in Organizations (with Nicolás Riquelme)

Abstract: We study how diversity and participatory decision-making affect organizational performance. Our model involves a manager who can acquire costly information to guide project selection, and a worker responsible for its implementation. We model diversity as heterogeneous beliefs between the organization's members and participatory decision-making as how much the worker's perspective influences project choice --related to notions of empowerment and inclusion. Our findings show that higher diversity enhances decision-making and implementation outcomes when the manager can access high-quality information and the worker is sufficiently empowered. When information acquisition is covert, the manager cannot signal her commitment to reducing disagreement, thus eliminating any benefits of increasing diversity. When communication is strategic, the associated credibility loss dilutes the manager's benefits from acquiring information, but the conflict of interest decreases with information quality. Our results imply that the `business case for diversity' requires complementary organizational processes that foster informational transparency and trust among members.

WORK IN PROGRESS

Incentives to Innovate and Multinational Competition (with Sébastien Mitraille)

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

Information Aggregation in Multidimensional Cheap Talk