Works in Progress
"Sequential Communication with Honest Experts"
May 2013
Communication between a decision maker (DM) and multiple experts, each of them being either strategic or honest types, is considered. The experts’ types are their private information. This information asymmetry regarding the ex- pert’s type improves the quality of communication between a DM and a single strategic expert. When a DM communicates with multiple opposing biased ex- perts, this advantage is minimized because the comparison of experts’ messages reduces information symmetry regarding the experts’ type. Communication with a single expert may be superior to that with multiple experts who have opposing biases. In contrast, a DM communicating with like biased experts uses communication with the second honest expert to improve information from the first expert. Communication with multiple experts who have like biases is always superior to that with a single expert.
Keywords: strategic information transmission, information acquisition, honest expert, multiple experts.
Journal of Economic Literature Classification Numbers: D23, D82, L22.
April 2013
Optimal contracts between a buyer and a seller who trade multiple goods under asymmetric information are considered. The seller makes sequences of unobservable investments, and then realizes the value of the goods. The investment level and value of goods are private information for the seller and the buyer respectively. In this situation, although the parties can write complete contracts, a hold-up problem exists. It is shown that each good is not traded sequentially in the second-best contract, but they are treated independently or as one bundled good. Dynamic contracts cannot solve the hold-up problem.
Journal of Economic Literature Classification Numbers: C72, D23, D82, D86.
November 2006
Information is indispensable for making good decisions. Although agents are privately informed, each agent knows only a fraction of the total information. This paper analyzes the decision and communication procedures in a multi-agent situation. For most of the paper, I compare two procedures, Hierarchical Communication and Horizontal Communication. In an environment where the principal cannot commit to her decision rule, Hierarchical Communication dominates Horizontal, since the latter induces agents to manipulate large amounts of information. A comparison with Delegation, another type of procedure, is also provided.
Keywords : information transmission, commitment, multi-agents, hierarchy.
Journal of Economic Literature Classification Numbers: D23, D82, L22.