Lucas Barros

Research

Quasi-Ironing

In many screening environments, agents contract with a principal while retaining access to an outside market. Buyers may supplement discounted packages through spot purchases. Workers may supplement primary employment by freelancing. When contracting with the principal is more efficient, the optimal mechanism crowds out outside trade, imposing a pointwise lower bound: each type must receive at least the allocation they would choose in the outside market. This paper introduces quasi-ironing,  a refinement of ironing based on quasiconvex envelopes that preserves the value and optimal solutions of screening problems with pointwise constraints.

In applications to product and labor markets, quasi-ironing reveals a spillover effect of nonexclusive competition that regularity rules out. By forcing the allocations of higher types upward, a stronger outside market can sink the upward-distortion cost of serving lower inframarginal types, increasing their allocation even if they are not at the margin of trading in the outside market.

Distortion-free Screening Problems

 The Limits of Information Acquisition in Cheap Talk

Revise and Resubmit, Theoretical Economics

Can designing one’s own information substitute for commitment in communication? This paper studies a sender who commits to an information acquisition policy but communicates with a receiver through cheap talk. The main result shows that, for finite action spaces, acquisition design attains the Bayesian persuasion payoff for every prior if and only if classical cheap talk, with no acquisition design, already does. That is, whenever commitment to communication is essential for persuasion, designing the sender’s information alone is insufficient. The result clarifies the role of commitment in information design and identifies a limitation of endogenous information acquisition.