Research

Abstract: This paper studies jump bidding in a war of attrition, where a bidder makes a costly preemptive commitment to deter opponents. We identify a Double-Edged Sword Effect: while jump bidding increases early-stage costs for the jump bidder, it enhances her ability to deter high-valuation opponents in later stages. The bidder jump bids when she believes that her opponent is likely to have a high valuation and not quit soon, such as when the valuation distribution is convex or bounded away from zero. Although jump bidding may result in inefficient allocation, it reduces total attrition costs and can improve overall welfare ex ante.

Abstract: This paper studies the intricacies of optimal selling mechanisms for incremental products, with a particular emphasis on scenarios where agents' private information profoundly influences their preferences across periods. To mitigate their intertemporal information rent, the manufacturer uses the optimal sales mechanism which encourages upgrades through refunds rather than payments, introducing inefficiencies but maximizing profits. Our findings reveal that even without commitments, the manufacturer prefers innovative upgrades in the iterated products. Importantly, consumers bear all efficiency loss due to innovative upgrades. Additionally, we reveal that per-consumer information disclosure allows the manufacturer to strategically tailor disclosures about innovation, enhancing incentives for truthful reporting and extracting more surplus from specific consumer segments.

Abstract: This paper explores the Market of Fame, where creators present unique outputs—such as academic papers or artistic works—to platforms for recognition rather than monetary compensation. The market is characterized by noise in quality evaluation and information asymmetry, as platforms lack visibility into creators' submission histories. A theoretical model demonstrates that creators adapt their strategies following rejections, while platforms raise acceptance thresholds to mitigate selection bias. In a dynamic game with incumbent and entrant platforms, the latter contends with unfair competition, receiving works previously rejected by the former. This insight sheds light on the formation of entry barriers in such markets.

Abstract: This paper investigates how information asymmetry arises endogenously in a searching model and how it leads to adverse selection and market inefficiency. A graduate sequentially searches among employers, receiving noisy signals about her type. While both parties observe the current signal, only the graduate retains her full signal history. As search continues, asymmetry grows, prompting employers to lower their wage offers, which may cause even the graduate to exit the market. We show that lower search costs worsen this inefficiency. Two remedies reverse the effect: either enlarging the market or introducing slight noise into the signal structure restores efficiency. In both cases, a subtle degree of information asymmetry, combined with competition among employers, raises wage offers and improves the graduate's surplus.

Abstract: This paper investigates how multi-product retailers use information disclosure to promote their private labels and compete with upstream manufacturers. Focusing on the difference between a classical retailer using wholesale pricing and a platform using agency-pricing, considering both homogeneous and heterogeneous consumer preferences for manufacturers' products, we explore how retailers optimize information disclosure and allocate consumer demand between their private labels and the manufacturer’s products. Our analysis reveals that traditional retailers employ threshold advertising and allocate less demand to manufacturers' products compared to platforms. However, if upstream manufacturers increase the diversity of consumer preferences for their products, they will have more demand. On the other hand, platform retailers, aiming to avoid direct competition, either target certain consumers through advertising in the homogeneous case, or do not disclose any information and focus only on the low-match consumers for manufacturers in the heterogeneous case.  The paper also addresses market foreclosure concerns, demonstrating that retailers have no incentive to exclude upstream manufacturers. Lastly, we provide policy recommendations for market regulators, balancing between lowering retail prices and managing consumer demand satisfaction.