Research

Working Papers:

We study public  good provision and technology investment when two parties, with differing values of the public good, alternate in power stochastically. In each period, the incumbent decides on public good provision and technological investment that lowers future costs of provision. We obtain the following results for Markov Perfect equilibria of the model.  i) When polarization is low, the steady state distribution is unaffected by the degree of investment reversibility, but when polarization is high, the party favoring the public good invests more, with both par- ties providing more public good under irreversible investment. (ii) Higher turnover results in increased levels of technology stock and greater public good provision if polarization is low. (iii) Under high turnover, as parties become more polarized, the expected technology stock and public good provision decline initially, but jump upward as irreversibility starts to bind.  

We investigate the effects of buyer heterogeneity in a market where an incumbent firm prevents entry when it signs enough exclusionary contracts with buyers. With heterogeneous buyers, several well-known results in exclusionary contracting with homogenous buyers are overturned and novel ones emerge. First, inefficient equilibria exist in which exclusionary contracts are signed but entry still occurs, and the loss of consumer surplus falls on small buyers. Second, sequential contracting may be more pro-competitive than simultaneous contracting in the sense that entry occurs under sequential but not simultaneous contracting. When this happens, sequential Pareto dominates simultaneous contracting.  We extend our analysis to consider downstream competition and breach of contract.

Even though people routinely ask experts for advice, they often have private information as well. This paper studies strategic communication when both the expert and the decision maker have private information. I analyze both one-way communication (only the expert reports) and two-way communication (the decision maker communicates first before the expert reports). In one-way communication, I find that non-monotone equilibria may arise (the expert conveys whether the state is extreme or moderate instead of low or high), even if preferences satisfy the single-crossing property. In two-way communication, the main question is whether the decision maker can extract more information from the expert by revealing her information first. In the course of answering this question, I derive comparative statics of the Crawford-Sobel equilibria with respect to the prior. I identify conditions under which truthful communication by the decision maker fails in equilibrium and discuss the possibility of informative communication by the decision maker.


Published Papers:

         (This paper supersedes an earlier paper "Optimism and Communication.")